Now that you have your Net Worth Statement completed, it's time to finish your assessment of your current financial situation by determining your cash flow. This is another extremely important step in the process of meeting your financial goals so again, please don't skip this! And again, please don't estimate!

Cash flow is simply an analysis of how much money you make less how much money you spend. After you finish your Cash Flow Statement you'll understand how much money you have at the end of the month to apply to your important financial goals.

Have you ever wondered where your money goes? Does it seem that you run out of money before you run out of the month? If so, the Cash Flow Analysis will help immensely. There's only one way to approach this. You must track your expenses and income meticulously for at least one month but it's preferable that you increase that to several months and that you repeat it periodically.

There are many ways to track your income and expenses. One of the most basic is to simply get a small notebook and carry it with you everywhere. Every time you spend money, write it in the book along with the category the expense falls into, such as groceries or gasoline. Every time you receive money, whether it's finding a quarter on the street or receiving your paycheck, record it in the notebook. There are also ways to take advantage of technology to make this process easier. If you have an iPhone or iTouch, you can download a budgeting application, such as AceBudget, to help. Or, use Mint.com, a free, highly rated, Internet financial planning tool. By the way, Mint.com also has an app so you can take it on the go.

When you've tracked your income and expenses for a full month, create sub-totals for each category and then overall for income and expenses. Now, subtract the expenses from your income. Hopefully, this number is positive and if it is, congratulations! You're living within your means. If it's not positive, it means that you have a cash flow problem. In other words, you're spending more than you earn and you need to fix this or you'll never reach your financial goals. I know this sounds harsh but it's true. The most important way to reach your financial goals and build wealth is to live below your means.

If you find yourself with a negative cash flow you need to sit down and take a hard look at where you're spending your money and at how much money you earn. Are there categories of spending that you can cut back on? Is there any way you can earn more money? Don't give up! You can do it with some shrewd money saving moves and perhaps by doing something on the side to make a bit more money.