How to Calculate Cumulative Cash Surplus

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How to Calculate Cumulative Cash Surplus....5

You can calculate cumulative cash surplus in a very specific way. Find out how to calculate cumulative cash surplus with help from a lawyer and author in this free video clip.

Part of the Video Series: Financial Education
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Video Transcript

Hi. I'm Ted Connolly. I am the author of "The Road Out of Debt". and bankruptcy lawyer and I'm here to talk to you about how to calculate cumulative cash surplus. Now, if this is what you have to do, this is really a happy endeavor. What cash surplus is, is basically the amount of cash you have at the end of the month on top of your expenses. So, really what you need to do is to get a budget and an income statement, so you can calculate what your expenses are and what your income is. And then figure out at the end of the month, what this cash surplus is for you. If your income exceeds your expenses, well congratulations. There's a cash surplus. If they don't, well then you have to do some changes to your budget. Now, just because you have a cash surplus, that doesn't mean you can go out and spend it at whim on a vacation or anything else you want to do. You have to look at your long term debt also. Because is calculated over long periods, just because you have cash surplus that month, doesn't mean the debt's not going to keep eating at that cash surplus. So, if you have cash surplus but still a lot of long term debt, use that cash surplus to handle the long term debt. You won't have as much cash surplus in this situation. You won't have as much you can spend freely, but it'll work out better for you in the long term. I'm Ted Connolly and that's how to calculate cash surplus.

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