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Management

“Our cash flow management process may be an appropriate solution for you to realise the financial potential you have and bring your budget back to surplus.”

Cash Flow

Cash Flow

If you are struggling to manage your personal spending or feel you’re not saving effectively, then our cash flow management process may be an appropriate solution for you to realise the financial potential you have and bring your budget back to surplus.

Below is an outline of our Cash Flow Management and Implementation process.

 

Cash Flow Management Process

  • Step 1 – Gathering information regarding your income and expenses. We also talk about your goals, objectives and other plans you have.
  • Step 2 – We help you identify all the working parts of your personal spending and how they should fit into the Cedar Cash Flow Manager.
  • Step 3 – We enter the figures into the Cedar Cash Flow Manager to determine your current Surplus or Deficit Position.
  • Step 4 – We will begin to coach you on the keys to good expense management.

Implementation Process

  • Step 5 – We assist you to amend your current banking facilities according to the Cedar Cash Flow Manager system. This is to ensure that you not only understand the system but are able to put it into practice straight away.

Review Process

  • Step 6 – The First Review of the Cash Flow Manager is after three months, although we will have usually corresponded with you several times during these first three months to make sure things are beginning to operate smoothly.
  • Step 7 – Cedar Cash Flow Manager Safeguard – If after the first three months you are having challenges managing the system, i.e. accounts overdrawn or over limit, then your adviser will contact you to discuss how to correct this.
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“Our process helps you to prioritise your debts more effectively and looks at ways to repay non-deductible debts faster or make correct use of deductible debt.”

Debt Management

What is debt management?

It is a strategy to assist you in managing your debts correctly. We look at the difference between ‘deductible debt’ and ‘non-deductible debt’ and our advice could involve the restructuring of loans, consolidating of debt and paying off certain debts faster, where appropriate.

What is the difference between deductible and non-deductible debt?

To determine whether a debt is deductible or not depends on its use:

  • Non-deductible debt is where money is used to purchase an item for personal use. For example, using your credit card debt to buy clothes, or taking out a home loan to purchase the home you intend to live in.
  • Deductible debt, on the other hand, is used to purchase an income-producing asset; for example, property that is rented out or dividend-paying shares.

Debt Management Process

Our process helps you to prioritise your debts more effectively and looks at ways to repay non-deductible debts faster or make correct use of deductible debt. In many cases even the deductible debt may not be appropriate for you personally, especially if the amount of debt being used is too much or the risk of the investment falling in value is high.

  • We show you how debt repayments affect your cash flow and what would happen if interest rates were to rise.
  • We demonstrate the effect of an investment loan (known as gearing), factoring in investment earnings and tax implications, helping you understand ‘positive’ and ‘negative’ gearing and whether these are correct strategies for your situation.
  • Lastly, we advise you on risk provisions you need so that you are protected from financial loss. Ensuring your ability to repay a loan is a very important part of any debt management strategy.
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Fun Fact

The history of loans is traced as far back as 4000 years ago, beginning with farmers borrowing capital for their business using grains and farm produce as repayment options.