2. Creating Your Cashflow System

Hello, and welcome to this module, creating your cashflow system. So now that we have a really thorough understanding of how we’re going to manage our money with the three bucket approach and how we’re going to take care of the past present and the future at the same time, what we’re going to do is get into the nitty gritty of creating this system in our particular financial situation right now. Okay. So here is what we’re going to cover. So the first thing I’m going to break down now that we have a really good understanding is of the buckets is finding your sweet spot. Now, this is important that you get this. So that way you can really put yourself in a really good position financially, then I’m going to get into customizing your template, defining your buckets clearly for each category that you have in your particular financial situation.

We’re going to get into creating your, my cash clarity account, because this is what we’re going to use to hold ourselves accountable. And then we’re going to do some spending audits. Then I’m going to end with the daily expense tracker. This is going to be a technique that we use to really, really bring visibility into our cashflow and our spinning decisions. So that way we can make sure we’re effective moving forward. So let’s go ahead and start with the first thing, finding your sweet spot. So we’re living in your sweet spot. So many of us, we have a comfort zone and that comfort zone is where we this is where we stay, or we remain. And we don’t really grow in the comfort zone. Nothing really happens in the comfort zone. So you guys have been going through this particular program to get yourself out of the comfort zone, because you were sick of being comfortable with bad credit, sick of being comfortable with not taking advantage of the things you deserve financially.

You were tired of all of that stuff. So you wanted to get yourself out of the comfort zone. However, we still need to make sure we’re getting ourselves at a comfort zone when it comes to our cashflow as well. So the problem that most people do is they try, to do this 360 turn and they put themselves in the kill zone. And let me define what these both mean. So the comfort zone, you already kind of understand I was already getting at this, but the comfort zone did you maintain to remain the same? So you’re not doing anything differently. You’re just maintaining. This is the place where you think you can do it, but you don’t do anything. You just think versus the kill zone is this is the level you wish you were at, but it’s just not where your current reality is.

And the problem is as many people want to start off with these cashflow programs and these budgets and changing, they tried it, they put themselves in a kill zone. They, they try to cut off everything. They try to shift everything and they can’t keep up with it. They can’t keep up with the new budget. They can’t keep up with the new plan. They can’t keep up with the new strategy. Then they end up falling back into the comfort zone where they remain the same. This is why up to this point. If you ever done a budget before you have done a budget, and then you found yourself backsliding back to your original behavior, because you try to go the kill zone too quickly. So what we’re going to do is find the sweet spot and the sweet spot is right in between the comfort zone and the kill zone, which means once we are at that place in between, this is what we can stretch.

This is our stress potential, cause we’re not quite in the kill zone, but we’re not, but we’re way out of our comfort zone. So it’s almost like when you start working out, you don’t want to start off working out five days a week. If you haven’t worked out five days a week before, I’d rather the five days a work week, two hours a day. I mean, that’s, you’re going to, you’re going to blow yourself out. Your finances are no different. So my suggestion is why don’t we just start off with something that’s way more challenging than is working out once a week. Why don’t we work out three times a week for an hour? And we just maintain that consistent pace. And then if we wanna, if we want to build up to five times a week, then we can do that. So what am I saying here?

Your cashflow is the same exact way we don’t wanna, we don’t want to put ourselves in and kills them because this is going to be new to you. So you have to really guide yourself into this new place. Just like everything that you’ve done up to this point has been new to you. You understand a lot of now credit revolving credit. We’ve we’ve done a lot to get ourselves into this place. So now in order for us to maintain this comfort, uh, maintain this, this, this momentum, we want to make sure we’re in our sweet spot. So I want to start with this on this particular module. So that way, as we go through and start creating the rest of our system, I want you to be thinking, okay, how can I stretch a little bit? Cause we’re going to get clear on everything. Once we’ve gotten clear.

I want you to be thinking about what additional things can I do to get that extra rep and get that extra day worth of work in. Okay. All right. So let’s go ahead and hop right in. So customizing your template. So right below this video, there is a cashflow template. This is going to be what we use to start the process. So the very first thing I want you to do was go download the, um, the template and then make a copy. Do not request access to the copy of the template because you will not be granted access. This is the default template. So it’s view only make a copy. Now, once you’ve made a copy, I want you to go back to your credit reports folder and create a cash flow folder inside of that particular folder. And then what we’re going to do is we’re going to save our cashflow template inside of that folder.

So we can stay organized. As you already know, organization is key. You’ve been doing a phenomenal job, staying organized, keeping all your things in one place. And now this, this credit reports folder is expanding. It’s being, becoming our centralized place. So we’re going to go and save this, this folder. We want to save our particular cash flow template in that folder. Now, once we’ve done all those things, what I’m going to break down is two tabs on this particular sheet. The first sheet we’re going to get into is the main assumptions tab. Then the second tab we’re going to get into is the forecast assumptions tab. So what I’m going to do is get out of this particular PowerPoint. Then I’m going to pull up the spreadsheet right here, cause I have it. So if you scroll down to the bottom of this video, you’ve been clipped right here.

It’s going to break, it’s going to bring up the actual template. So, um, I am going to open up in a new tab. So that way it opens up for me. And then the very first thing I want to do is file. Make a copy, just like I was saying it. Okay. Okay. Then once we’ve done that, we have a copy of our cashflow template. So it’s going to say copy of cashflow control template. Then you should be logged into your particular email. I am going to go to my personal email and um, I don’t know, I don’t, I don’t need to request access to this.

Um, make a copy. So, um, make a copy. Then once you’ve met a copy, you’ll be able to save this particular, um, deal inside of your folder. And let me just go over here and do that really quickly. Um, make a copy. I said, this is a copy of it.

You were signed in no. So just disregard all of this. You’ll have the opportunity to, because I have so many emails, you’ll have the opportunity to make a copy and then save it. But once you do that, you will go over to your particular folder and then you would just upload your Google sheet right there from where you’re going to get it. So you would just upload that sheet into your cashflow folder, the same exact way you saved all of the things in the past. Okay. But the biggest, the biggest thing I want to make clear is you want to make a copy of the copy so that way you have it and then just upload it to your folder. And you want to create a cashflow folder inside of your credit reports folder, just like this and save your template there. Okay. Now, once you’ve done that, let’s talk about the first tab.

So the main assumptions tab is going to be four themes that we want to identify. So the first thing we want to do is put our net income. So I have income source one through five. So you can rename income source to whatever your income sources. So it could be, you know, for me it would be, you know, job one, you know, so for you, it might be job one. You know, if you have a side business or another job, I’m gonna be job two. If you happen to be an entrepreneur and you have a home-based business or a part-time business that can be business or side hustle one, and then if you are in a relationship or you’re married, you would just put your spouse’s income. So spouse income, if that was necessary, and then you’re going to put so whatever it, whatever income sources that you have.

So if you receive an SSI income or Omni child support, all of your income sources need to go here and I want you to define your income sources. So that way it’s clear. Now here’s the thing. When it comes to your income source, I want you, and we’re going to get into this on the next tab, but we want to, we want to make sure that we’re looking at our income from a net take home pay. So we’re not concerned with gross. We wanna know net because net is what we receive in the bank account. Now that’s the income tab we want to, we have to do this in the main assumptions. Now the next tab is going to be our fixed bucket tab. Now I’ve already taken the Liberty of predefining some fixed bucket expenses that are traditional. However, after you, if you go through here, you notice that there’s a fixed bucket expense.

That’s not on here. Then I want you to add it. So I’ve, I’ve already put written mortgage cell phone electricity. And then if, if it’s not, your electricity could be your utilities. You all, your utilities could be in the same deal, right? So if you wanted to put them all like that, so I just put electricity, cause some people have to pay electricity separate. So, so that electricity electricity, please forgive my spelling. So if you needed to add like a water bill, so to speak, if you needed to do that or trash, if you needed to add that the moral of the story is his tape. I want you to put all of your fixed expenses that don’t change. Notice red mortgage is a, is a, is a fixed expense. That’s actually tied to our credit credit reports. So we want to make sure that that’s tied there, um, per auto loan, personal loans, student loans.

So again, those are those revolving installment accounts that are going to be there credit cards, notice credit cards for debt reduction only. So we want to make sure that we for sure make our minimum monthly payments on our credit, on our credit cards. Now I’m not saying we only want to make our minimum monthly payments, but we want to set up our minimum monthly payments for sure, without a shadow of a doubt for all of our credit cards. So that way we don’t miss a payment because again, remember that fixed bucket, those expenses are, we want to make sure we maintain the 192.5 points. Okay. So go through and define all of your fixed bucket expenses. These have already been put in here, but if you have some additional ones, like I’m already saying this, add them then our variable bucket. So again, I’ve taken the liberty of already putting what traditional verbal bucket expenses are.

If you have some additional verbal bucket expenses that you want to add is real simple for you to go to the bottom and then just add them. So again, I put groceries, gas, parking parking may or may not be relevant for you. Coffee shops, lattes that may or may not be relevant to you. So if you needed to change that from coffee shops, lattes to maybe, um, lunches, if you eat out a lot or if you go out to lunch or if you wanted to change to dinners, right? If you go out to dinner a lot, or if you wanted to change that to, um, for my medicinal medicinal users, if you wanted to change that to, um, you know, marijuana, I mean, again, I’m not trying to call you out, but if that’s what you do, you need to put that there because that’s a variable expense.

Moral of the story is if you don’t see that there just type it here and put that down. So that way you, you know, and even if you don’t want to make it that clear, you can just include it into your meals and meals and recreation. So I’m just going to put in lunch here. So we just wanted to find all of our variable expenses there. And even if you want to, I just put shopping clothes, shoes home. So if you want to further define that shopping between just clothes and shoes, so you can do, you can do, Hey, look, I want to do shopping for shoes and clothes. And then I want to do shopping for home. You can define that even further there. And then the last thing is our future bucket. And again, these are just some future bucket categories that I, that I suggest, but you can make them whatever you want.

So my, my, my suggestion is always going to be to have some type of emergency fund or emergency reserves account, just so you can know, uh, if something happens here, um, if you want to start defining holidays and gifts, vacation, and travel, home improvement, charity, if you have any retirement accounts, which is something we’ll get into, but you can define that now, or you can just say, Hey, look, I want to have a new home fund, or I want to have a education fund. Right? You can define that right now. So you want to go ahead and define that if you have a retirement account. So you want to go in and put that there. And again, this, this retirement account that I’m saying right here has more to do with retirement outside of work. So if you already have a retirement program at work and taking money out, then there’s no need to include that this is over and above that retirement program, if you want to have it.

So I just put a few things here. So a Roth IRA, if you have one of those retirement plan, one retirement plan, too, if you want to put money, or if you currently put money towards your brokerage account, if you have investments, all that stuff like again, like I was saying to module two, you know, now Christmas and Thanksgiving is coming up. So if that’s something you celebrate, you can go ahead and start putting money aside for that. Now, if you’re self-employed or you’re a business owner, and you’re not putting money aside for taxes, then I suggest you put money aside for taxes. You want to put that money aside on a, on a, on a monthly basis for taxes, if you are self-employed. But again, we want to define all of these expenses upfront. Now that’s the main assumptions tab. Once we’ve completed the main assumptions tab and we define everything, clearly we can go over to the forecast assumptions tab, and then this is where we’re going to go.

And we’re going to put in our information in our buckets. So this is fairly simple. So the first thing we’re gonna do is when night we’re going to, we would have already named our income sources. So that’s to say, I have job one, I have job two. And let’s just say, um, you know, I have a spouse and we have a side business as well. So what we want to do is put the annual amount after taxes, which means if I have job one and my net income is $2,500 every two weeks after taxes and deductions, then that means 25 times 2 is 5,000. 5,000 times 12 is 60,000. So notice I put the annual amount right there. So let’s just say my annual net income from job one is 60,000. And then let’s just say, my annual net income from job two is, let’s just say 10,000, which is like $883, um, you know, a month.

Okay. And then let’s just say, my spouse’s income is $40,000 net. Right? And then let’s just say, our business makes us an extra 15,000 a year. Okay. And that’s basically 1250 a month. Now, again, whatever your numbers are or whatever your numbers are. Okay. So this is just saying, Hey, look, if I have two jobs and my spouse is working, and then we have a side business, or my spouse has a side business, or we have a side business or whatever the case is, what we’re looking at in this particular amount is the monthly amount that is actually received in the bank account after taxes ended up in deductions, because that’s what we want to use from a cashflow perspective. Now, once we’ve defined the income, clearly we now can go over to our buckets. Now we have fixed bucket and I want to reiterate the fixed bucket is a 35% account.

So we want to make sure that we are maintaining all points available to us in that fixed bucket account. And then we can start leveraging our revolving credit with our variable bucket account. So I will really simply just go here under the description. And then I would select what I am doing that I just did. So if I had written mortgage, let’s say that’s 2000. Then I had cell phones. So I would choose cell phone. And then I would type in whatever my cell phone bill is. This is, this is say it’s 150 bucks a month between me and my spouse, electricity. We call it 75 bucks, life insurance. We’ll put it a hundred dollars. And again, if you don’t have life insurance, uh, that’s something you definitely want to, you want to look into, um, in one of our future modules, I’ll be, I can point you guys in the right direction if that’s something you need.

So that way you get it. But, um, again, you, you want to make sure you have life insurance auto and home insurance. You would put that there. So whatever you guys are paying there, and just go through and put down all of the items that you’re paying. So the personal loan, then you guys a scenario more than likely would be the credit builder loan. So that credit builder loan technically is doing two things. It’s building your credit and it’s saving, but I would still put it down as a loan because it affects your credit. So we have to make sure we pay that. So we would just put down whatever you set your credit builder loan up to be. So let’s just say it’s a hundred bucks. You would just put a hundred dollars and then auto loan, you would do the same exact thing.

So let’s just say you’re paying 500 bucks. You get the point. So go through all of the expenses that you just set up on the previous main assumptions tab and identify all of them in your fixed buckets tab. Now at the same time, I want you to go through and name your variable bucket expenses. And again, this is that 7 to 14 day money that pay period money. So the way I have it outlined is set weekly. So that way you can know how much money you’re putting here weekly, and then how much money you’re putting, putting here monthly. So you can do the same exact thing as well over here. Let me see.

We confirmed that. See if that works at that way. Um, I don’t think it does 39. Does it? Um, so don’t worry about it with this column one. Um, but right here under the weekly amount, you just want to put down into your variable bucket, how much you’re spending on groceries. So if you’ve identified that you guys spend $125 a week on groceries, um, which would be very humble. If you’re a family, you probably spend a North for about 250 bucks a week on groceries, then gas. If it’s between the two of you guys, maybe a hundred dollars a week, if you do have to pay for parking, you will put that there, coffee shops, lattes, if that’s relevant to you, or if you have eating out, you know, if you, you might go out to eat, you know, you might like to go out to eat. Maybe that’s a hundred bucks a week. You want to put that there. So that way, you know, so you just outlined all of your, your, your expenses there, that you’re spending personal hair, shopping $50 a week, whatever you’re spending.

Let’s just say you guys are spending, you know, $150 a week on shopping. Um, so that’s basically, it’s telling us that we’re spending 770 a week on our verbal bucket. And that, that equates to $3,080 on a monthly basis that we’re spending in our variable bucket. And I didn’t finish clearly defining all of the fixed bucket expenses, but we have right here, 3125 that we have spent in our fixed bucket. Okay. Now the other thing that I suggest too, and I’m going to get into nuances in a weeds in a previous module, I had you guys open up an Indigo card or a milestone card. My suggestion is that you use that card for one of these expenses and you pay it off before the end of the month. So that way you can build the credit, pay it off, build a credit, pay it off, build a credit, pay it off.

Okay. So you want to go out and make sure you get that knocked out and you do that because it’s going to be a really good way that you can use that revolving account, but also make sure your balances are paid down to one to 7% there, but you get the point, right? We’ve got our income define, we have our fixed bucket defined. We have our verbal bucket define. Now what’s, what’s left over and we can identify what’s left over. So we can see that our income is showing right here, our variable bucket, which again, our variable in our fixed bucket are showing right here. And it’s saying that we have a surplus of $4,200. Now that’d be a phenomenal surplus. Um, I doubt that the surplus would be that much. So you would just make sure you go through and you define your you, you define everything.

So that way, you know what your surplus is because if I come over here and just add, you know, I don’t know what I would add. Let’s just say I added two loans and listen, say Sallie Mae is beating us in the head $1,500 a month. Right. My surplus is, and I go now, right? Um, so you can see that the surplus is decreased significantly, right? And let’s just say, I’ve got another, you know, $2,000 worth of $2,000 worth of fixed expenses. And then that brings my surplus down way, significantly to like $711. I’m going to put 1500, $1,500 in expenses. So that means that I would have a surplus in this example of $1,200. And now we can say, Hey, let’s put that $1,200 towards our, our future bucket. Now, one of the things that we can do, and I haven’t talked about is if you want to put your, if you want to do debt reduction, right?

So if you’re saying, Hey, look, I’ve identified that my credit card is, is, you know, X, Y, Z. And I want to do my credit card payments. Let’s just say that this is your credit card debt, or you want to get that debt that down, and you want to pay on the credit cards. So you can just be putting all that towards your credit card payment, and then anything that’s over. Right. We have that $1,200. So that’s the set we want to put 500 bucks. Let’s just say we’re going to put $300 towards our emergency fund when they put another $300 towards are, um, um, yeah. Emergency fund or is it $600 towards the morning emergency fund? Let’s just say, we want to put, um, you know, 150 towards travel. We want to put another, um, let me see education. We want to put another 150 towards our child’s education or whatever your thing is. So that’s $900. So that still leaves us with a surplus at 300 that’s to say, we want to put, you know, $200 a month towards Christmas fund. So we’re at 1100 and then, you know, well, we just want to, we would just want to add another a hundred dollars and our miscellaneous expense account, just because, all right. So now that brings us to really, um, let me see. We have a surplus here.

Actually. No, we don’t have a surplus. So I’m going to take that away. Not a hundred dollars. Let’s just say we want to put $25. Okay. All right. So

That, that’s how that works. So that means that we are maximizing our cast. We’ll get $11 and 67 cents available, you know, and how I know that is because we’re spending $3,100 a month in our variable bucket. We’re spending $6,100 a month in our fixed bucket. And we’re accounting for everything from those fixed expenses. Then we have future bucket. We have, um, $1,100 going towards our future, future track, you know, future transactions, anything that we know what we’re going to need and anything we know we’re going to want. Okay. So that’s how we do this. Now this is pivotal. So take some time on this and make sure you get this knocked out because this is going to really change your life. So don’t, half-ass this, I’m sorry for cussing. Don’t half-ass this spend some time here, you and your spouse, you’d go through this, make it happen, define everything clearly, make it happen.

So that way, you know, you have that clarity around your, your cashflow and your, and your finances. Okay? So the next thing we want to do is once we’ve done that is we want to go ahead and create our, my cash clarity account. Okay? So this is really, really simple. So all we want to do is right below this video and right below this module, we can click on the, my cash clarity, cheat sheet. Now, when we click on my cash clarity, cheat sheet, it’s going to take us to this particular sign up sheet. And inside of this sign up sheet, all we need to do is fill out our information. All right. So what I’m going to do is I am going to create a cheat sheet right below this video and inside of this cheat sheet, I’m going to walk you through everything. Step-by-step showing you exactly how to create your, my cash clarity system.

So that way it’s clear, it’s concise and how to make sure you set everything up. And then you do the last thing when it comes to auditing your transactions, auditing your spinning, all that good stuff. So you want to take a peek at that cheat sheet. Uh, I just want to make it very, very detailed as you get that set up. So make sure at the end of watching this video, you go and you complete the, my cash clarity sign up with this particular process. Now, the last thing I want to cover in this particular module is the daily expense tracker. All right, now, at this point, we have already defined our buckets. We’ve set up our, our, our customization cheat sheet, with the, uh, template, we have created our right cap or our my cash clarity system. We synchronize our accounts. We’ve done all that stuff now to end this module.

Here’s what we’re going to do with this last action step. So I want you to download the daily expense tracker sheet. Okay. Now what you’re going to do is you’re, you’re going to record every purchase for the next seven days. If you want to be aggressive, you can do it for the next 14 days. If you to be super, super aggressive, you can do it for the next 30 days. But I think 7 or 14 days is a good timeframe. Seven days is a good timeframe. So you want to record all of your transactions for the next seven days. And what you’re going to do is you’re going to record the date of that transaction, the description of that transaction. So what it was at this point, you know, the differences between your buckets. So, you know, if it’s a fixed bucket expense, you know, if it’s a variable bucket expense, or if, you know, if it was a future bucket.

So I want you to put down what that was. You’re going to write down the amount. So that way it’s clear. And you’re going to put down whether you use just straight up cash, if you use credit or debit. So many of you will probably be using more debit and cash then credit. But if you are using those, those credit cards that you set up, then you’re going to put down that type of card that you use. Then you’re going to define whether that was a need or a want. Now this last exercise is required. Download this in. You’re going to put yourself in position to where you’re seeing all of your transactions in the next seven days. Okay? So download this. This is your last action step that you needed to complete. So let’s go ahead and recap here. Number one, we’re going to complete our, our cashflow control template. We’re going to set everything up the way I showed you to set it up. Number two, we’re going to go to the, my cash clarity, cheat sheet, establish our account and followed all the steps there. The number three, we’re going to do this daily expense tracker. Okay. So let’s get all of these action steps knocked out, and then I will see you in the next module. Automating your finances.