Cash Flow

What I've done is to figure out how to keep my cash flow positive. It's been a struggle because I had to radically change the behaviors that made my cash flow go negative too often.

What's important to me about a business is how much cash it brings in. Profit is an accounting artifact. Cash is where God lives. And because right now my business is living, so I daily track expenses and income to make sure that I'm never in the red. I'm on social security so I watch my cash outlays like a hawk. I've got my cash flow so that it's positive by reducing my expenses down below my income. Now my job is to get more income.

I never spend anything I don't have to without being sure I'm going to get back more in value than I spend. It might be supplies that I need to run my business or it might be a cup of coffee so I can go off to a caffeine den or think or read away from the office. I try to keep the caffeine trips to a minimum.

I record everything I spend. Even if it's 5 cents. Really, I do. It's amazing how your behavior lines up if you watch the money. Last summer I got lazy and didn't keep timely cash flow records. I lost my shirt. Now I have expense it back.

What I've done is to set up a spread sheet so that I know exactly how much I have left at any point of the day. It's simply monthly income - monthly expenses = balance. I can watch that balance seep out of my accounts every day and stem the tide when I do. I don't wait until the end of the week or the end of the month or the end of the quarter. It's too late by then.