How to Track Your Cash Flow With Tiller (Plus Quick Cash Flow Calculator)

Cash flow is a key indicator of your financial health.

In simple terms, your cash flow is your income minus your expenses. That’s how we define it here at Tiller.

If your income exceeds your expenses, you have a positive cash flow. If your expenses exceed your income, you have a negative cash flow.

Given the definition above, we recommend categorizing your transactions based on the following guidelines:

• Income: This includes your salary, any bonuses, income from side jobs, dividends from investments, and any other money you receive regularly.
• Expenses: These are the costs you incur, such as rent or mortgage payments, utility bills, groceries, transportation, entertainment, and any other regular or irregular expenses.
• Transfers: Money moving between different accounts such as credit card payments, transfers to savings, or transfers to investment accounts. 

When calculating cash flow here at Tiller, we include transfers as a type of expense because they reduce your available “cash” or ability to spend. 

Of course, with Tiller you can always categorize your transactions as you wish. For example, you can categorize your mortgage as a transfer rather than an expense if you prefer.

The topic of categorizing transfers always popular in the Tiller Community; for example, read what people are saying about transfers here.

Using the Foundation Template as a Cash Flow Spreadsheet

The easiest way to keep up with your cash flow is with the Spending Trends dashboard in the Tiller Foundation Template. This template automatically calculates your cash flow based on your actual daily spending and income.

You’ll see your cash flow for the selected time period in rows 7 and 8:

The Spending Trends sheet is included in the Foundation Template as of August 1, 2023. Follow these steps if you don’t have the Spending Trends sheet installed in your Foundation Template.

You can also see your monthly and annual planned and actual cash flow on the Monthly and Yearly Budget sheets in your Foundation Template. 

Using a Quick Cash Flow Calculator

Here’s a quick and easy cash flow calculator in Google Sheets to estimate your monthly cash flow.

How to make your own quick cash flow spreadsheet:

List Your Income 

List all your sources of income. This could be your salary, income from a side job, rental income, dividends, etc. Also, it’s best if you use post-tax income to calculate your cash flow. 

List Your Expenses and Transfers

Write down all your regular expenses, such as rent, utilities, groceries, and transportation. Don’t forget to include irregular expenses like annual insurance premiums or quarterly tax payments.

Calculate Your Cash Flow

Subtract your total expenses from your total income to determine your cash flow. If the result is positive, you’re earning more than you’re spending. If it’s negative, you’re spending more than you’re earning.

By understanding and managing your cash flow, you can take control of your financial life and make progress towards your most important financial goals.

How to use your cash flow number 

Understanding and tracking your cash flow is helpful for:

Understanding your financial health: Your net cash flow gives you a snapshot of your current financial situation. If it’s positive, it means you’re earning more than you’re spending, which is a good sign. If it’s negative, it means you’re spending more than you’re earning, which could lead to debt if not addressed.

Budgeting: Your net cash flow is a key factor in creating a budget. It helps you understand how much money you have available to allocate to different areas, such as housing, food, transportation, entertainment, and savings.

Savings and investment: A positive net cash flow allows you to contribute to your savings and make investments. This can help you build wealth over time and achieve long-term financial goals, such as buying a house or planning for retirement.

Debt management: If you have a positive net cash flow, you can use the surplus to pay down debts faster. If your net cash flow is negative, it’s a sign that you may need to cut expenses, increase your income, or both.

Financial planning: Your net cash flow helps you plan for the future. Whether you’re saving for a vacation, a new car, or your child’s education, knowing your net cash flow can help you determine how much you can afford to set aside each month.

Building your emergency fund: A positive net cash flow can contribute to building an emergency fund. This is a safety net of money set aside to cover unexpected expenses, such as medical bills or car repairs.

In summary, your cash flow number is a vital tool in personal finance.

It helps you understand your financial situation, make informed decisions, and plan for the future.

By understanding and managing your cash flow, you can take control of your financial life and make progress towards your most important financial goals.