Five rules for managing cash flow: Mr. A. Balasubramanian, Chief Executive Officer, Birla Sun Life Asset Management

02 January 2016
LiveMint

A. Balasubramanian, Chief executive officer, Birla Sun Life Asset Management shares the five rules for managing cash flow

• Spend less than you earn
  High credit card debt and personal loans are signs that you don't have a good cash flow system in place. If your expenses are more than your income on a regular basis, you will find it difficult to achieve your financial goals.
• Estimate monthly spends
  See bank and credit card statements to see where your money goes. Find a number that is your monthly spend. If nothing is left over for savings, go back and start cutting out non-essential spends.
• Make a savings target
  Start with just 10% of income if you are a spendthrift. For those who are more disciplined, salt away at least 30% of your income.
• Create two bank accounts
  Move the money that you want to save out of one account by the 10th of each month, and put it another bank account. Spend using only the first account.
• Salt away bonus money
  Of course, you could spend some of it, but put away a bulk into your investment account.