Creating a cash flow system

Creating a cash flow system By Zena Amundsen

I want to share with you the money management system that changed my life.

It is a concept of creating and using a cash-flow system for sustainable money management versus a budget. Drop the word budget from your vocabulary and replace it with a cash-flow system.

What is the cash-flow system?

It’s a way of setting up your money management, so what needs to get paid is paid first.  This system is a way to control the flow, the ins and outs, so that you have peace of mind that you are putting your money exactly where you want it to be.

First, all of the fixed expenses (the essentials that must be paid) are covered and on automatic.  Then, we create a plan for your variable expenses by taking the leftover amount from your income (after the fixed-expenses) and dividing that by 4 weeks to get the weekly allowance that you can spend as you choose.  

Tip – Fixed expenses are the bills that must be paid like mortgages, loans, utilities, insurances, retirement, and savings. Variable expenses are the expenses that you can control and that fluctuate like groceries, clothing, entertainment, and other personal spending.


This system means once your bills and ‘must be paid’ expenses are covered, you spend the rest as you choose using your weekly allowance.

No tracking your variable expenses!

I used this system on my family and practiced on them for six months before sharing with my clients.  I remember thinking, “It can’t really be that easy”. But it was!

Once we implemented this system I felt less spending guilt and less stress. The weekly spending money is guilt-free money to spend as you choose, knowing that you’ve taken care of all the other buckets – the ‘must be paid’ fixed expenses.  

The beauty of this cash-flow system is that you get to spend your weekly allowance on whatever you decide is important.  You can spend without remorse because you have ensured all of your other buckets (fixed expenses) are full and on automatic.

I love it because I don’t have to cut everything I love from my budget. That’s the old-school way of thinking.

Every time I would go to the bank and stand in line, I would see a sign about the “latte factor” shaming people over how much they are spending on coffee each year.  But, I love my specialty coffee! I can’t imagine starting a work day without a grande chai with skim milk and a shot of espresso.

I am happy to spend a portion of my weekly spending money on my coffee.  I happily pack my lunches and menu plan in order to save the money and choose my spending on a coffee. I have even joked about choosing no name toilet paper and no name face cream so that I can spend money on something else – like coffee!

Using this cash-flow system means you don’t have to cut everything you love from your budget. There is a prioritizing mindset that kicks in and allows you to spend on the things that are of value to you. This creates guilt free spending.

Here’s how to set up your cash-flow system:

  1. If you haven’t taken stock of your fixed expenses yet, head over to this post to do this first.
  2. Figure out your cash-flow amount using the formula:

(Income – Fixed Expenses) / 4 = Weekly Spending Money

  1. Set up a separate fee-free account with a debit card for just your weekly spending amount.
  2. Once a week, review your spending for the week and replenish the account with that week’s amount.

You can download my Cash-Flow Planner here.

Your 2019 Financial Resolutions – Taking Stock

Your 2019 Financial Resolutions – Taking Stock By Zena Amundsen

Is the holiday hangover starting to sink in?

I love the 90’s movie Groundhog Day, where the actor Bill Murray finds himself living the same day over and over again. This movie reminds me that January could be another Groundhog Year if we don’t make any changes.

“Insanity is doing the same thing over and over again and expecting different results.”

Let’s kick the money overwhelm and guilt to the curb this year by taking stock of where you are right now.

The first thing to do is gather all of your mail. Do you have any unopened mail? You know the unopened bills you put aside until you felt ready.

We are going to take inventory of what things need to be paid, including any new expenses that may have come from the holiday spending.

The benefit of taking stock is that we are creating clarity and removing the mystery around your finances.

One client I worked with had a really tough time with taking stock and creating an inventory of her finances.

We had to work in baby steps and it really took a few nudges for her to start. We met a few times, there were tears, and she shared with me that she felt she had no one else to talk about money to because of the shame she felt.

But once she actually took stock – wrote down her expenses and debt, she felt that the biggest hurdle was over. This step combined with regular tracking of the numbers was incredibly motivating for her.

Full disclosure here, it took some work on her part for a few months while she took stock and created a plan. But, with the continuous progress of her financial goals, she is a new woman now.

  • She has a savings account.
  • She goes on regular holidays.
  • She gained the confidence to apply for a promotion that she previously doubted she get.
  • She paid down debt – a line of credit by $20,000!

Without that essential first step of taking stock, none of this would have been possible for her. It took 3-6 months for these results to start showing up, but these never would have been a light at the end of a dark tunnel if she had remained stuck.

Here’s how to start:

  1. Take inventory of all income coming in
  2. Write down all of your fixed bills (the things you know need to be paid by a certain date on a regular basis)
  3. Write down all of your debts

FYI: Fixed expenses are all of the things that must be paid like the mortgage, utilities, loans, debt, insurances….

You can download my FIXED EXPENSES to help you create your list of fixed expenses.