Money management is the cornerstone of every financial plan and the foundation for every financial future. Even with optimal risk management through insurance, a solid estate plan, minimal taxes and an extraordinary investment portfolio, if you fail to properly manage your money you will fail. Just like a house built on sand, a poor foundation of money management will continue to erode and deteriorate until the inevitable collapse of the structure. On the flip side, even with humble beginnings, through effective money management a significant estate and substantial wealth may be accumulated.
Our primary tools in this endeavor are cash flow and balance sheet, they will gauge our success. From our balance sheet we can know our net worth. Cash flow and net worth represent the cumulative result of all of our financial actions and decisions.