Personal Cash Flow Statement for Healthcare Professionals

Feb 13, 2019
6 min read
7,138 views

Personal Cash Flow Statement for Healthcare Professionals

If you’ve never created a personal cash flow statement for yourself before, your life is about to change. Seriously.

You’ve probably used budgeting software like Mint or maybe even something more advanced like Quicken, but they only give you a snapshot of your finances today, they don’t predict your future finances.

Planning for your future is what matters most and for many healthcare professionals, whether you’re an optometrist, physical therapist, occupational therapist, or speech language-pathologist, knowing your future finances can make or break you.

Today we’ve got a video that explains everything you need to know about cash flow and an amazing Google Sheets cash flow statement template.

You’ll learn how to:

  • Thoroughly understand what cash flow is
  • Understand how to manage your cash flow each month
  • Plan for 3-year and 8-year time horizons as well as retirement
  • Plan for short term goals
  • Plan for long term goals

Note: Be sure to watch the full Vlog episode that teaches exactly how to use this tool!

Planning for your future is what matters most and many healthcare professionals, and whether you’re an optometrist, physical therapist, occupational therapist, or speech language-pathologist, knowing your future finances can make or break you.
Matthew Geller, OD

Matthew Geller, OD | CEO - CovalentCareers

Cash Flow Calculator Template For Healthcare Professionals - What Is It?

First, let’s define personal cash flow. Cash flow is the net amount of cash being transferred into and out of your personal accounts. A cash flow planning statement will forecast for you your net cash at any point in time in the future.

Cash flow planning is a way to plan for your financial future. It's not just budgeting, it's not just retirement planning, and it’s not just profit and losses. It's all of those things wrapped into a single forecasting statement.

One of the first steps in cash flow planning is understanding what's important to you. That's going to be extremely variable, but you should take into consideration:

  • Hobbies
  • Family
  • Vacation
  • Houses
  • Giving back

After you understand your financial goals, you can prepare your cash flow statement using the template we provide.

Cash flow planning also consists of understanding how the money you spend today impacts your future self. Treating your own personal finances like a business is a great frame of reference when it comes to establishing your own personal cash flow statement.

What can a cash flow statement help you understand?

When to invest heavily vs. when you should pay off those student loans 🤔

Paying off optometry student loans aggressively at the expense of investing in retirement is always a question new graduates face. The answer to this can vary dramatically, and the approach you take can have major financial implications for your short term and long term financial goals.

When you should buy your first home 🏡

Buying a home is one of the biggest financial decisions you will ever make. Can you afford a home? What price tag can you afford? What do the down payment and mortgage for that home look like? How does the amount of debt you're in impact the answer to these questions? The key is cash flow planning!

Tip: A general, conservative rule to live by is to avoid being "house poor." This means you should not over-leverage yourself in a house payment compared to your take-home pay. A good rule of thumb is that the payment number should stick somewhere between 25-32% of your after-tax/take-home pay.

How your tax rate impacts your retirement and financial picture 🛣

Everyone needs to pay taxes. Your earnings and tax rate can dramatically impact your cash flow. This means that being classified as an employee or independent contractor can impact the cash you have available in the immediate short term and long term.

How much you should contribute towards retirement in both 401k, IRA, and savings 💵

This depends on how much you want to retire with! The ability for money to grow over time through compounding is incredible. Small increases in retirement contributions can add up massively over time. If your target goal is to retire with one million, two million, or ten million dollars in the bank, understanding the effects that changes to your contributions have will be critical.

Cash Flow Calculator Template For Healthcare Professionals 🛠

The first thing you will need to do is make a copy of the Google Sheet so that you can edit it. If you don’t make a copy, you can’t edit it. There are many tabs not hidden in the spreadsheet that you can simply ignore. You will primarily be using the Financial Controller and editing only the blue columns!

Spend time familiarizing yourself with all of the different tables inside the cash flow planning template:

  • Starting financial status
  • Retirement savings
  • Long term savings
  • Student loans
  • Income and tax rate
  • 401k
  • IRA
  • Bonuses
  • Expenses
  • Large monthly expenses
  • One-time expenses
  • Monthly expense increases that may occur

You’ll want to spend some time looking at the retirement calculator tool that is built in and have a general idea of how much money you think you will need to retire with. This will impact your cash flow analysis.

NOTE: We cover how to use the calculator in depth, table by table with a detailed explanation on what each column and table means. We highly recommend you watch this segment before you begin. It begins roughly 11 minutes into the video!

NOTE: If you are curious as to how different student loan payoff strategies might affect your cash flow, fast forward to 23:55s in to see what an aggressive payoff loan strategy will do to your entire financial picture for the short and long term.

This cash flow calculator can show you how even the smallest financial decisions, like paying an extra $50 a month towards your student loans, can impact your retirement savings 1, 2, 3, 5, 10, 20, even 50 years down the road!

Similarly, you can understand how small changes in contributions to a 401k, IRA, or similar retirement avenues can impact your more short term financial goals. Additionally, you can gather a clear picture as to how delaying contributions to retirement for a certain number of years can change your entire retirement balance!

Understanding cash flow is paramount to understanding your financial goals. Starting this process even before you finish optometry school will put you well on your way to achieving what financial freedom means to you!

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About Matt Geller, OD

Dr. Matt Geller is an entrepreneur with a track record of developing successful online platforms to solve problems in the healthcare space. Matt is the co-founder and CEO of CovalentCareers and NewGradOptometry.