I like to think that I live my life by the principle of the statement of cash flows, but I know that’s a bad analogy. The key is to keep adding and subtracting money throughout your life, so you don’t get bored and run out of “money.” Money is not a static entity; it changes over time, so you need to make a conscious decision to stop adding to it and start withdrawing.
If you do this correctly, you need to be able to tell what the cash flow is at any given time. If you can’t, you’re on your own. I think this is what the statement of cash flows is about. It’s a tool to help you decide what to spend your money on. The idea is that you are the one who makes the decision as to how much you spend (which you can then deduct from your income).
I think this is a great way to remind you of something that needs to be taught in finance classes, and that is that you need to be able to determine when you are spending money and when you are spending it. We tend to forget sometimes that things change, but this is a great tool to remind you that you should always keep a close eye on the money you are spending.
This is one of the primary reasons I’ve always been against the idea of using a statement of cash flows as a way to track expenditures. Because it is one of the primary ways that we track our spending, it is often a great way to hide the fact that you are spending money.
To me, statements of cash flows is one of those things that is just a really good tool for keeping tabs on expenditures. It can be a very useful tool but it can also be a really bad tool. It is not that it is bad, but it can be very misleading. So it would be good to have a tool that could be used to help you track when you are spending money but not provide the information that you are actually spending it. But I digress.
The main reason why I don’t use cashflow is to allow people to sort out the myriad ways that they are spending their money. To be honest I don’t really care about how they spend their money. I don’t have any real interest in having a cashflow tool but it’s a way to make sure that your spending isn’t a waste of time that you don’t want to spend.
And I think it is helpful to know just how much of your money is spent every day. That way when you realize you are wasting money then you can actually do something about it. Its a way for me to track the way that I am wasting money.
I think the primary purpose of a cash flow statement is to track just how much money you are spending on each day. And a lot of people like to think that its a way to tell them how efficiently they are using their money. But that is wrong. A cash flow statement is just another way to measure how efficiently you are spending it. And that is a waste of your time if you are just blindly adding up every single dollar you spend every day.
The fact is: a cash flow statement is probably a waste of your time. After all, most of the money you spend on things like groceries, clothing, and entertainment probably is a waste of your time anyway. It is just like the way you waste your time on the amount of time you spend on Facebook.
Cash flows can also be a good way to see where you are spending your money. If you are spending a lot of your paycheck on rent, or on paying for a car, you will find that all of your income is being used up to pay for rent or a car. You wouldn’t want that to happen. This is a good way of knowing how much money you are spending on things.