When people think about financial planning, they tend to think of retirement funds, investing, and saving for the future. However, another key component of your finances is to understand your current cash flow. After all, your retirement savings won’t grow very quickly if your current financial situation prevents you from putting away enough money.

Many people focus on health or weight goals as their New Year’s resolution, but gaining a better understanding of your finances is also a very worthy goal. Aside from managing your spending and saving, learning to manage your money can benefit you in the future. When you retire, you’ll most likely have a pre-determined budget each year. Learning to live within your means now can help you enjoy a more satisfactory retirement later.

The first step to managing your cash flow is to identify your average 30-day expenses. This will include items such as rent or mortgage, utility payments, car payments, and so forth. However, this is where most people stop with their budget planning – and it is where most people fail. If you don’t go beyond this step, you’ll fail to plan for all those other expenses which crop up every few months, such as new tires on the car, co-pays on medical procedures, or seasonal gift-giving.

For a few months, track these variable expenses on a weekly basis, and learn to incorporate some room for them in your monthly budgets. Remember to plan for these types of expenses, so that you don’t have to rely on a credit card when they occur. Decide upon an amount to set aside in a savings account each month, and use that account to pay for unexpected expenses or planned vacations.

Finally, always incorporate retirement saving into your budget plans. Talk to your financial advisor and determine an amount you need to save for retirement each month. Treat this as a priority just as you view your house payment as an obligation, and you won’t be disappointed at retirement time.