Money Guy Show Budgeting vs. Cash Flow Management: What’s the Difference?
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Jul 22, 2024 Exploring the differences between budgeting and cash flow management, including the concept of 'reverse budgeting'. Tips on navigating life events post debt-free status, smart car purchases using financial rules, and optimizing excess cash. Insight on retirement savings strategies for a mid-30s individual seeking long-term financial stability.
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Brian’s Budgeting to Cash Flow Shift
- Brian Preston shared his personal transition from detailed budgeting to cash flow management as life circumstances changed.
- He found tracking every expense became impractical after marriage and preferred automated savings and spending control.
Smart Car Buying Tips
- When buying a car, put 20% down, finance for no more than 36 months, and keep car payments under 8% of gross income.
- This keeps debt manageable and allows you to regain debt-free status within a reasonable timeframe.
Manage Emergency Fund and Excess Cash
- Keep your emergency fund between three to six months of living expenses in a high-yield savings account.
- Invest excess cash once your financial steps are mastered and you have surplus beyond emergency needs.