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.