3. Cash Flow Planning – Insights

Please note: These insights are intended for people going through Financial Peace University and are not a substitution or a recap of the coursework or presentation.

While you’re working through the 9 Baby Steps, the Monthly Cash Flow Plan serves as the framework to make everything happen.

One major insight:

• This isn’t for everyone but one major key for success for me was to use Quickbooks Online. I live in an area where carrying cash in envelopes would probably get me shot. Quickbooks is an accounting software that has an online version that costs $39.99 per month. For that $39.99 per month it tracks my purchases in ‘virtual envelopes’ – and creates reporting so I can see at any point in the month what’s left in any individual envelopes.
• Here’s how it works in short form: You enter your ‘Monthly Cash Flow Plan” as a ‘Budget’ (the first time you do this you will create categories for everything, or ‘accounts’), then you enable the online banking for anything you use, i.e. the bank you bank at, any alternative debit cards, i.e. your Paypal account, and then start spending according to your written Monthly Allocated Spending Plan.  Transactions will download to your register, then you categorize them or assign them categories as they come in. Then to see where you are at in your envelopes, you can create a ‘budget vs actual’ report for the month and track exactly what’s happening. It’s not for EVERYBODY but it certainly did help me.  You still need to do a written Monthly Plan each month and go into Quickbooks and add those numbers each month but it really is a good tool if you are not safe carrying around cash or want another level of reporting. Even if you do envelopes you can assign the ATM withdrawals – withdraw each envelope separately so it creates different transactions for you to track in Quickbooks – you can still use cash, just assign each withdrawal accordingly.
• When you are doing your budgeting, take inventory of what you buy on a regular basis and then look in the internet and see if – with careful planning – money can be saved. I have 6 ferrets in my care and the food is $22 per bag with tax and we need 4 bags a month, so that’s $88 per month. However I can order online – with some careful planning – for $13 per bag. That’s $52, a savings of $36 that I can use for something else. I can also order bedding which saves me about $4-$5 a pack, I use 2 of them per month, so that’s another $10 in the budget saved that can be used for savings or other line items. Ordering online for ‘consumables’ takes a bit of planning but can save a lot of money at the end of the day.Petco: 4 bags of Ferret Food, 1 bottle of Odor Away, and 2 bags of Bedding: $190.20 vs. Doctors Fosters and Smith – EXACT SAME PRODUCTS – not similiar – EXACT Same: $103.93 shipped… Smart budgeting is planning ahead.

Next Up: Dumping Debt