What is a key characteristic of a cash flow plan?

A key characteristic of a cash flow plan is that it tracks income and expenditures. This aspect is crucial because understanding where your money comes from and where it goes is essential for effective financial management. By keeping a detailed record of all income sources and expenses, individuals can identify spending patterns, determine areas where they might overspend, and make informed budgeting decisions.

A cash flow plan serves as a roadmap for managing finances, helping individuals allocate their resources wisely. With this tracking, one gains insights into financial health, enabling better planning for both immediate and long-term financial goals. Accurate tracking can encourage proactive financial habits and foster greater awareness of monetary decisions. Ultimately, the ability to track income and expenditures is what helps in crafting a more sustainable financial future.