CASH FLOW MASTERY A SECRET METHOD TO “BUDGET” USING NATURAL BEHAVIORS AND DIGITAL BANKING TO STAY DISCIPLINED WITHOUT BEING DEPRIVED.
MASTERING YOUR CASH FLOW IN 5 EASY STEPS
1 DETERMINE THE “BUCKETS” OF MONEY YOU WANT
2 OPEN MULTIPLE BANK ACCOUNTS
3 QUICKLY & EASILY CALCULATE YOUR ALLOCATIONS
4 AUTO TRANSFER $$
5 EASILY REACH YOUR FINANCIAL GOALS
HOW TO DETERMINE THE “BUCKETS” OF MONEY YOU WANT START WITH DREAMS
YOUR
GOALS
&
I will admit, we took Dave Ramsey’s “Financial Peace” class years back. It was a time in my life that we were living paycheck-to-paycheck and in extreme distress in my business. We thought we might have to file business bankruptcy. The issue my husband and I were having in this class was that Dave NEVER talked about increasing your means. All he ever did was talk about how you need to sacrifice and scrimp for years just to get your head above water. We were not in debt because we lived lavish lifestyles or over-spending. Our debt was business debt and we wanted to have an abundance mindset. His system just didn’t quite feel right.
In comes inspiration; “Profit First” by Mike Michalowicz Using this system and making some big moves (changing location, doubling down, etc) we were able to quickly turn my business around. We didn’t do it by scrimping and saving and struggling more than we already were. Combining this concept with a few others that are on the abundance side, we took it a step further and started to utilize our own version with our personal finances. And when our success started multiplying, our lifestyle creep didn’t.
Let the FUN begin!! What are you NOT willing to give up in you lifestyle? What do you want to add consistently to your lifestyle? Even if it seems impossible right now, within a few short months your values will tell your money where to go.
HOW TO DETERMINE THE “BUCKETS” OF MONEY YOU WANT SOME FUN AND SOME NOT-SO-FUN STEPS TO DETERMINE YOUR BUCKETS The Not-so-Fun First 1. Sit down and categorize all of your recurring expenses. 2. Trim the fat...it’s just good to check yourself every so often and eliminate useless lifestyle creep...do you really need 5 different streaming services? 3. What necessary expenses can you reprice by getting new quotes? The FUN part 1. Aside from these necessary expenses, what are your goals and dreams? 2. Let’s Dream a. How many vacations do you want to go on per year and what would the budget look like for that? b. What BIG things do you plan on spending money on in the next year or two? House projects? Motorcycle? Anniversary Party? Second home? There is no limit to your dreams. This is YOUR life.
WHY TO OPEN MULTIPLE BANK ACCOUNTS NOW THAT YOU HAVE YOUR GOALS AND A GRASP ON YOUR SPENDING, YOU NEED ACCOUNTS. SAFE Based on expert advice, I personally believe that having 3-6mo living expenses saved in a fire-proof safe. WHY? If there is a true emergency, you are covered. This money is not meant to make you money, it is meant to give you peace of mind. All of this is optional, but this would be “account” number one!
Credit Card Find a credit card, if you don’t already have one, that specifically addresses one of your goals. Dare I say, consider one that isn’t just a “cash back.” We have done the calculations, and the value we have received on our Hilton Amex WAY surpassed a cash back card. Travel is a big part of our values and goals with our children, so that is why we picked this particular card. You could also break it up into 2 cards that provide you with different benefits. If you are doing this, we highly recommend doing a Visa/MC and an Amex since not everyone accepts Amex!
WHY TO OPEN MULTIPLE BANK ACCOUNTS Optional Bank accounts: Number 1, 2 and at least a 3rd are required! Bank Accounts: 1. Holding Account a. This account “holds” all your incoming money. b. This account is NOT used for a single expense. c. This makes the calculations easier. 2. Expense Account a. All your normal household expenses. b. Connect this account to make your credit card payment. 3. Debt Account a. Move all amortized loan payments to this account to see how much is going out each month. b. We can tackle this account with another on of our favorite methods! Hint: It’s not Dave Ramsey’s snowball... 4. Escrow Account a. This would be for any funds you need to reserve based on your situation. Insurance, taxes, personal income tax payments, etc. 5. Lifestyle (aka Delayed Gratification instead of unnecessary consumer debt) a. We have a separate account for each of these. b. This would be the fun things like vacations or that in-ground pool you have always wanted. 6. Giving/Stewardship a. This could be tithing if you practice that, or just donating items you purchase or money to your favorite foundation. 7. Wealth Accelerator a. This is your money you set aside to invest. b. It could also be money you set aside to create your estate.
HOW TO QUICKLY & EASILY CALCULATE YOUR ALLOCATIONS YOU ONLY HAVE TO DO THIS ONCE Allocations All your money goes into your HOLDING account from all income sources.
Step ONE You first allocate your required monthly expenses as a dollar amount. In order to calculate how much that is, take your total monthly expenses multiply by 12 (annual) and divide by 26 (bi-weekly). That $$ goes into your EXPENSE account. The goal is that you always have a little buffer in that account for those months you overspend.
Step TWO Set up an auto transfer from your HOLDING account to your EXPENSES account for every two weeks. Step THREE Set up an auto payment from your EXPENSES account to your credit card(s) every two weeks (if possible). If you can only do monthly, than set that up. ~This should be a payment to payoff the entire balance each month. If you cannot do that, you are overspending! You have 2 options: make more or spend less~
HOW TO QUICKLY & EASILY CALCULATE YOUR ALLOCATIONS CONTINUED... Step Four If you have a DEBT or ESCROW account, do the same thing. Determine the dollar amount to transfer every two weeks.
Step Five With every other account, you will be using percentages. Time to decide on those by prioritizing and budgeting.
Step Six Take your monthly expenses, debt and escrow payments x12 to get your annualized amount. Divide that by your annual NET income. This will give you a percentage. Subtract that percentage from 100%
Step Seven Based on your priorities and the remaining accounts, divide the percentages as you see fit. If you have a certain goal you are wanting to hit, like a $10,000 vacation, than what percentage of your annual income needs to go to that goal to hit it? Maybe it will take 18 months? You decide! You should have one account that is “last.” Meaning, if you overspend one month, that account will not get funded. ~If you cannot fill all the accounts you want to, it’s time to expand your means!~
WHEN TO TRANSFER $$ NOW THE EASY, STRESS-FREE PART OF THE SYSTEM CAN TAKE PLACE. Set Up Your Auto Payments Now that you KNOW you have the money to cover every single one of your expenses, it’s time to bring peace to your life. You can set up auto payments from your credit cards and expense/debt account(s) for those bills that won’t let you pay with a credit card. Set up your internal transfers. Your auto transfers can be all your dollar amount accounts. So expenses, debt, and escrow. For all your percentage accounts, you can login once or twice a month and take the percentage of your total NET holding deposits for that time frame (even though some of the money transferred out).
LET’S SEE AN EXAMPLE...
WHEN TO TRANSFER $$ Annual NET Income $138,762 Monthly Expenses: $3,784 Monthly Debts: $6,598 (Includes Mortgage) $3,784 + $6,598 = $10,382 x 12 = $124,584 $124,584 / $138,762 = 90% = 10% Discretionary Income Set up auto transfers from HOLDING to EXPENSES of $1,746.46 bi-weekly starting on your next payday. Set up auto transfers from HOLDING to DEBT of $3,045.23 bi-weekly starting on your next payday. Set up your credit card auto pay(s) for 1-2 days after your transfers. That amount should equal paying off the entire balance. ~If you carry a balance on your credit card right now, consider putting all of your discretionary income toward eliminating that balance!~
Calculate your TOTAL HOLDING deposits. Using this as a salary, let’s say it’s $5,337 every other week. You have 10% discretionary income. So you have $533.70 to divide up among your chosen accounts. VACATION: 2% of HOLDING = $106.74 (after a year you would have $2,775.24 assuming this account earned 0% interest) WEALTH ACCELERATION: 8% of HOLDING = $426.96 (after a year you would have $11,100.96 assuming this account earned 0% interest)
HOW TO EASILY REACH YOUR FINANCIAL GOALS START WITH DREAMS
YOUR
You Have the Power It’s definitely not fun to take a hard look at where all your money runs off to each month, at first. Once you trim a little fat, set up your accounts and start allocating, your willpower magically changes. You have declared what it is that you want and have set up an “atomic habit” to get there. This easily keeps you “in check” because you have your sights on bigger and better things in life. You also gain confidence to expand your means knowing that it only increases your FUN accounts! If you have no discretionary income left over at the end of the year based on your calculations, it’s time for a reality check. Do you want to spend $6/day on coffee or be able to put money toward a vacation? You now have the knowledge and the power to tell your money what you value.
GOALS
&
ADVANCED METHODS IF YOU GET THIS ALL SET UP AND WANT TO KNOW HOW TO VELOCITIZE YOUR WEALTH EVEN MORE, APPLY TO JOIN THE ACORN CIRCLE. Community People who are like you and are looking for others that want to discover their full potential too.
Adventure Take that vacation money and use it to experience bucket-list level adventures with others like you.
Wealth Lessons Cash Flow Indexing Velocity Banking Infinite Banking Income Shifting and so many more amazing concepts like this!
Investing Short-Term Rentals, Car Washes, Self-Storage, Apartments, Real Estate Note Lending and many more opportunities constantly presented to our club. Choose 1 or 100 different options, it is completely up to you! Once your invested in 1, you can invest as little as $5,000 in every subsequent offering for real diversity that is tied to tangible assets.
APPLY TO JOIN
APPLY TO JOIN
CONCLUSION WE WANT TO SUPPORT YOU IN YOUR PROSPERITY JOURNEY! If you found this eBook exciting and want to have a simple spreadsheet tool that we created to get you started, it’s also yours for FREE!
CASH FLOW CALCULATOR
We are looking for awesome, smart people that want to expand their network and their net worth. Before being accepting into The Acorn Circle, you have to first have discretionary income. Everything we do is geared around building wealth. Without breathing room in your personal finances, it effects your peace, your mindset and your ability to contribute value to the other members.