Question

how to create a simple monthly cash budget

Answer 1

Any business or individual creates a cash budget to plan the cash flows. The cash budget helps a business/individual achieve it's short term financial goals and look it for any short term financing needs as well. It is prepared on a month by month basis.

The steps towards creating a simple monthly cash budget is :

We need to start with the cash balance available to us in the beginning of the period, we can add into it all the cash receipts available, if there has been any disbursements then those are deducted, now we determine weather has is a cash surplus or deficit. What is the financing needed and at the last we determine the ending cash balance.

The prepared cash budget is used to control, or regulate or expenses. This cash budget can help us reach our financial gaols. If your cash budget is not leaving enough to meet the savings needs, look at expenses and how you can reduce them.