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Cash Flow Modelling Explained

Updated: Jun 16, 2022

Updated 16/6/22

Perhaps you’re mulling over a number of different pathways…whether you can afford to retire at 60, how much you can spend on a new extension, whether you can help out a grand-child with school fees….but if you choose one or more of these options will your money run out, and if so when?

What is Cash Flow Modelling? Cash Flow Modelling puts you in the driving seat, enabling you to see a clearer financial picture before making any decisions*. It allows you to test out the impact of any combination of actions/events on your cash flow in both the short and long term, before making any life choices.

Why consider it? It allows you to, amongst other things: make informed decisions, keep your finances organised and working in a way that provides the best potential for you to achieve your dreams, identify and manage any tax liabilities and ensure that any surplus income is working as hard as it can for you.

How does it work? We will take time to fully understand your aspirations. We will then model a number of different ‘what if’ scenarios using specialist software that takes into account your wishes, approach to risk and also variables outside your control (eg inflation, redundancy, long-term illness, interest rates etc).

How often do you do it? This isn’t a ‘one off’ exercise. We work closely with our clients to review their finances and cash flow models on an ongoing basis .

Next Steps Contact us if you’d like to find out more about how Cash Flow Modelling could help your decision making.

* The Financial Conduct Authority does not regulate Cash Flow Modelling. It is important to ensure that information provided for a cash flow model is as accurate as possible. A cash flow model is only as accurate as the information entered within it.

This article was written by Culverhouse Financial Planning Ltd.

The article outlines just some of the things you could consider in relation to Cash Flow Modelling. It does not represent financial advice. If you would like personalised financial advice please contact a financial adviser.

Remember that the value of investments can fall as well as rise and past performance is not a guide to future performance.

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