What are the benefits of a cash flow budget?

Story by Andrea Valadez-Angulo
Photos courtesy of the Transfer Student Success Center

Students received helpful hints on how to manage their finances as California State University Monterey Bay’s (CSUMB) Transfer Student Success Center (TSSC) held an online financial literacy workshop focused on cash flow management.

With their third semester workshop, the TSSC aimed to “help students learn new skills for developing a budget,” said Iamberto Figueroa, an TSSC administrator.

While the workshop was held by the TSSC, the advice and information the workshop provided are helpful for all college students struggling with having consistent and manageable expenses.

Many students may not know the term cash flow, but the concept is relatively simple. A cash flow tracks the timing of one’s income and expenses. A cash flow budget helps individuals visualize when their expenses are coming in and out.

Third-year TSSC Peer Mentor Jasmine Valdez said having a cash flow budget instead of a regular one helps you manage bills and “be able to reflect on your finances and realize what you could do better.”

This budgeting will help ensure you have enough money to pay for the expenses you will have during any given month. Budgeting this way is helpful for everyone, but specifically for those with “limited or irregular income, or someone living paycheck to paycheck,” explained the TSSC. 

Having a week-by-week view of your income and expenses will help you choose between cutting back or postponing certain purchases and avoiding any missed payments.

The TSSC provided a foolproof way of creating a cash flow budget.

First, it’s helpful to create a bill calendar so you can see when all your bills are due. Next, ask yourself if moving certain bill payments around could help you through the month.

It’s essential to notice when bills are usually heavier during the month. For example, if you have all your accounts on auto-pay at the same time toward the beginning of the month, you will quickly run out of money during the last few weeks of the month.

The next step is to create a budget for all your monthly expenses, such as subscriptions, gas, groceries, etc. To do this, the TSSC recommends using the Consumer Finance Protection Bureau’s template provided below.

Finances are a touchy subject and it’s often easier to just avoid thinking about them altogether. 

“It’s important to confront your biggest fear and check your bank balance,” said Chris Huante, a fourth-year peer mentor. “We don’t want to face the truth that we’re spending too much,” so having a physical budget that details every expense coming out of your bank account may help relieve a little bit of stress and anxiety.

The TSSC wants students to know that several campus resources are available to help with financial insecurities, such as the Basic Needs Hub and financial workshops like this one.
The TSSC plans to have more workshops every semester dedicated to helping students stay on top of their finances. For more information, visit their website at https://myraft.csumb.edu/tssc/home/.

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