Cash flow at risk
Cash flow at risk is when we want to make sure we have enough money to pay for important things we need, like food, rent, and toys.
Imagine that you have a piggy bank where you keep your allowance every week. Sometimes, you get more or less money depending on how much your parents can give you.
Now, let's say you know that next month you need to buy a new toy that costs $20. You only get $10 allowance each week, so you need to save up for 2 weeks. But what if something unexpected happens and you need to spend some money on something else, like if you get sick and need to go to the doctor?
This is where cash flow at risk comes in. It means we need to plan for unexpected things that might happen that could affect how much money we have. To do this, we can make a list of all the things we need to pay for and how much they cost. Then, we can think about what might happen if we don't have enough money, and make a plan for how we can save more or spend less.
So, cash flow at risk helps us make sure we have enough money to pay for important things even if something unexpected happens.
Imagine that you have a piggy bank where you keep your allowance every week. Sometimes, you get more or less money depending on how much your parents can give you.
Now, let's say you know that next month you need to buy a new toy that costs $20. You only get $10 allowance each week, so you need to save up for 2 weeks. But what if something unexpected happens and you need to spend some money on something else, like if you get sick and need to go to the doctor?
This is where cash flow at risk comes in. It means we need to plan for unexpected things that might happen that could affect how much money we have. To do this, we can make a list of all the things we need to pay for and how much they cost. Then, we can think about what might happen if we don't have enough money, and make a plan for how we can save more or spend less.
So, cash flow at risk helps us make sure we have enough money to pay for important things even if something unexpected happens.