Managing Cash Flow

Wow -- I am still amazed at how complex managing personal finances gets once you get married. It's like that corporate project that gets extra headcount to speed things up, but yet everything slows down because more communication, more interlock is needed.

When it was just me, I always had a running tally on the month's cash flow in my head. I knew if I was ahead or behind for the month and what was coming so managing cash flow was easy. If there was a big expense looming I would buckle down, delaying expenses in other areas to normalize the cash flow. Worked great.

Now things are not as flexible as they were. I just can't take the month's cash flow and allocate it to a large expense or investment if I wanted to. I have to anticipate expenses and keep a much higher buffer (how was I suppose to know we had to get a fancy new comforter for the bed this week? how was she suppose to know I had to take someone last minute from work out on the town?) - it was much simpler when it was a one-man team.

However, it's not a bad thing. Being married means there are more income streams and likely a larger pie to divide up during the month than before. It just requires a more conservative plan and regular communication to make it work.

My wife and I have realized this is where we need to focus for now when we discuss finances. Rather than talking about investments, life planning, retirement funding, reviewing the 100+ account balances we have, etc we need to focus on becoming a well oiled machine when it comes to managing our cash flow. It narrows the scope, makes this whole merging finances aspect seem so much less daunting at times, and lays the ground work for the rest of our financial merger.

I mentioned earlier that I needed to improve the financial reports that are used to help my wife and I communicate about our finances. I think I have a clearer understanding of what I need to focus on at least initally in reports we use. Cash flow is king.