Experts share DIY financial tips to help you manage your cash flow

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a july Bank of America analysis of his non-business bank accounts suggests that a number of his clients have dipped into their reserves this spring.

The study, which sheds light on only a partial snapshot of consumer finances – based on the first quarter of 2022 and looking at the bank’s own customers – found around 20% of customers suffered a loss net, depositing 85 cents or less for every dollar they withdrew.

Interestingly, people with higher incomes were more likely to have this gap between their income and their expenses. Although the report doesn’t include data on where the money is going, David Tinsley, senior economist at Bank of America and author of the report, said people with higher incomes could fund investments or pay for things. while counting on a bonus. They also tend to be older, so they may be paying for college or have large house payments. For middle- and low-income families, more income is spent on housing and basic expenses, and as these costs rise due to inflation, their budgets are stretched.

It is also not clear whether these account holders draw regularly on savings or whether the months studied mark a change. But, Tinsley added, having that kind of data is a starting point. “If someone’s expenses are greater than their income, it at least makes you want to wonder why that is and if it’s sustainable,” Tinsley said.

Greg McBride, chief financial analyst at personal finance website Bankrate, said anyone who overspends or struggles to save should check their spending to get their own data.

“It’s a fundamental starting point for someone who runs out of money before the end of the month. You have to know where the money is going,” McBride said. It’s a good habit for everyone, he added.

For people with disposable income, McBride shared a tough love for rethinking spending habits at a time when needs cost more and there’s less money left for wants.

“Just as it’s a lot more fun to eat what you want, when you want and not have to count calories or restrict your intake, it’s a lot more fun to spend freely and without a care in the world than to track spending and say ‘no’ to yourself on the things you want,” he said. “But discipline is a necessary ingredient for success – whether it’s finances, diet, exercise, or any other area in which you want to be successful. It’s easier said than done, and that’s why not everyone does it.

Bankrate has a budget calculator that can help you piece together a detailed overview of your monthly income and expenses.

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