How to MANAGE Your Cash Flow & Budget for EASY FINANCIAL SUCCESS || Money Monday

How to MANAGE Your Cash Flow & Budget for EASY FINANCIAL SUCCESS || Money Monday


Hi everyone, welcome back to my channel.
This video is an incredibly important one. It is how to manage your cash flow
and budgeting. If you can master the art of managing your cash flow and budgeting.
Life is going to be so much easier you. You will be so much more successful in achieving
your personal lifestyle and financial goals, and it’s a lot easier than you
think. Now before if I launch into this video. I
want to make sure that, not only you subscribe to my channel already. But more
importantly you’ve switched on that notification button. So you know the
moment I’ve uploaded a new video around getting out of debt, cash flow and
budgeting. Investing, building long-term passive income streams and financial
freedom. Also if you really enjoy this video and want to watch more about it. And learn more about it. I recommend watching this video over here that I previously
filmed. At the end of this video. Alright let’s talk about cash flow and budgeting.
Now first of all no one has really taught how to manage our cash flow
budgeting. It’s not taught at home and more often than not is not taught in school or
university. But when you know how to do this you’ll actually really enjoy your
banking ritual, and you’ll feel so comfortable and so secure financially.
Knowing that you’re on top and in control of your cash flow and budgeting.
Now first of all I want you have all your bank accounts with the one bank . No
more savings accounts floating around in cyberspace. Because if you can’t see it
you’ll forget about it. And I know so many people who’ve opened up those
savings accounts and put $20, $40. After a certain period of time they’ve
completely forgotten about it and don’t even know how to log in and get that
money. I want you to be able to log on to your internet banking whether it be
through your app or your desktop. And see your entire cash flow situation right
then and there. This is about making it easy and efficient so that you actually
do it. The first account that I want you to have is an everyday to savings account. With a linked ATM debit card. This account is where you allocate money
every time you get paid. To pay for your daily, weekly, monthly, fortnightly
expenses. This is where you set up all your direct debits to come from.
So the gym memberships, the mobile phones. This is also where your spend to get
your coffees and lunches. And your weekend spending money. You never use credit
cards you always just use your everyday savings account. The next account is your
lifestyle and emergency account. Now before I explain this account. I want to
explain why most of us get in trouble with money, or cash flow and also
end up in debt. More often than not our budgets are not the same month-to-month. We might have a really quiet month where we don’t have as many living expenses.
And we might have some money left over. And it creates a false sense of security.
Because we see that money that’s left over we think. ‘oh wow I’ve got a bit more
money in the account that I normally would have. I’m gonna go
buy myself something new.’ And we go and spend that money. However the next
month, or the following month we get hit with a bill that we completely forgot
about was coming up. And we don’t have enough money in our account so we spent
it the month before. So we reach for a credit card and get ourselves back into
debt or even worse we get ourselves deeper into debt. Now this is why I
recommend you have a life and emergency savings account. This is like your float
account. This is where you stockpile your finances and your cash
flow. In preparation to all those ad-hock or irregular bills. So for example our
quarterly bills like electricity bills. Or biannual bills, or our annual bills.
This is where we will always see at least a couple of thousand dollars in
this account. So that when bills come our way. We are not rattled financially and
we can get back on with living our lives. And building up these accounts again. Now
within this life and emergency account is your SOS money. So this is the money
that keeps you out of trouble. If anything should happen out of the blue an emergency. Again your financial cage is not
rattled. Now the question that’s probably burning on your lips is. ‘Well Canna how
much money should I have as an emergency savings amount?’ Well there is no
one-size-fits-all. Everyone is different it depends on what stresses you out
financially. And what your financial responsibilities are. Now for someone who
is young say living at home. Got a really good cash flow. They may only want and
need say five thousand dollars in emergency money. It’s enough to get them
through for a couple of months of living expenses and not having to borrow money
from people. However I say a young family on one income. With say three young
children may need a lot more than that. It may be closer to say $15,000. However you need to ask yourself, what number or what amount of money in my
savings account. Would help me sleep well at night. Now once you know what that
number is. I want you to nickname this account with that number in there. So in
this example, we would have our life and $5,000 emergency savings account. As the
nickname so we can see that every time we log on to our internet banking. Now
there is a reason or a method to my madness. It is to stop creating a false
sense of security. If we had say $6,000 in our life account. And one day
we decided I’m gonna go and upgrade my laptop. I’m gonna go and spend you know
five or say fifteen hundred dollars upgrading my laptop. We’re going to spend
that money but actually we don’t really have that money to blow. Because of that
six and a half thousand dollar account balance, five thousand dollars is
allocated for emergency money. So we cannot be blowing this money
unnecessarily. It is for an emergency use only. I want to make sure you’re aware budgeting and cash flow is not about
being mean, or depriving yourself financially or being the fun police.
It’s about balance and it’s about giving ourselves spending boundaries that
simply all it is. And with boundaries it makes us accountable. So for the example
of when you want to upgrade say a laptop, or buy a new dress, or a new handbag. That
is perfectly fine we just allocate that to each separate
account. Now this would be our lifestyle account and I want you to nickname that
account in align to you goal. For example new handbag account, or new
laptop account or. In my case it’s my holiday savings account. Now the fourth
and final account is actually your financial goal account. This is where I
want you to put money in on a regular basis towards a long-term financial goal,
that’s important to you. So whether that be saving up for the deposit on your
first home, or whether it be saving up for an investment portfolio, or even if
you’re not quite sure what that goal might be. I want you to still open up
this account so you create intention and purpose and direction for your cash flow.
Now for me personally this is my savings to invest account. I put money into this
account on a regular basis and let it sit there until I know where I want to
invest that money, and for what financial goal. It is really easy to set these
accounts up. And these three should be internet-based account. With the same
account this means as these accounts build up you’re actually earning some
interest on these savings accounts. Now the next step is to work out our banking
rituals. So we know exactly how much money to allocate to each of these four
accounts. So that we’re always on top of our cash flow I would feel great about
our finances. Now I actually have two tools available for you. If you subscribe
to the sugar mama website you will get a complimentary budget template to work
from. Which will help you work out your total cost of living and how much money
you need to allocate to these accounts. The second tool that’s available for you
is this sugar budget app. Which you can download from the iTunes Store. This is a
much more advanced version, it’s quite visual. And explains to you exactly the
banking instructions to allocate this money. Now if you’d like to learn more
about this I recommend you watch this video here, which is a tutorial as to how
to use the sugar budget.
It’s something that I use on a daily
basis and is really helpful. And the links to subscribe to the Sugarmamma
website are right here. And the link to download the sugar budget app is also
right here. But also in the video description box below. All right so how
do we allocate our money. Say for example I get paid $2,000 after-tax per month by
my employer. And my employer pays my pay into my everyday
account. From using the sugar budget app or using the complimentary budget
template. I know that my living expenses for the month, are around about $1,200
per month. If I’ve got that much money in my account I should be able to survive
financially. I then look at all my upcoming bills that are coming in. I
might even check my diary to see what’s due. And I now know that going forward I
need to start allocating, approximately $500 per month into this account. Not
only to pay for these upcoming bills. But also to slowly start building up my
$5,000 emergency account. I then look at my lifestyle goal, which is for example
to buy say a new handbag. And it’s gonna cost me $2,000 I’d like to buy it and
say ten months time. I know that if I want to achieve that goal in time I need
to start putting $200 a month away into this savings account. I also want to
start doing the thousand dollar project and buying some shares. So I don’t know
what shares I want to buy yet. But I’m gonna start saving anyway in the
preparation to that. So I’m going to start putting say $100 per month into my
savings to invest account. This is the banking ritual I will follow every time
I get paid. It is allocating the right amount of money for what is important to
me. However if I decide I really want to focus on building up this put emergency
money sooner. Or I know that iv’e got some big bills coming in my way sooner rather
than later. And I know that they’re $500 per month it’s going to cut me short. I
can do something else. I’m giving you a quick get out of jail card for free. You
can temporarily for go, or simply cut down on these of two accounts for the
time being to quickly stockpile this is a priority. So for example you might want
to hold off on doing this and maybe, either reduce it to zero or $50 here. And
say $100 here, which then allows me to put a little bit more into my life and
emergency account. Like this so you actually have my permission to
occasionally tweak your banking ritual. As long as you’re putting money to each
of these savings account and achieving your
financial goal. So the moment you have more than five thousand dollars in
emergency money and a healthy float in your life account for these quarterly, bi
annual annual bills. You can start beefing up these accounts if that’s
what’s important to you. But the point is you stick this banking ritual month
after month after month. So you don’t even think about it you just simply do
it. Now this is something that I personally do every month. It gives me so
much security and comfort knowing that I’m on top of my cash flow and I never
need to rely on a credit card to get me out of trouble. Now that is it for this
video. If you have any other tips or tricks that you think other people would
benefit from. In knowing how you manage your budget and your cash flow. Please
put a comment in the comments box below. I always absolutely love hearing from
you, and as I said before if you want to learn more about managing your cash flow
getting more ideas and inspiration and education. Make sure you click on this
card here to watch the next video. And as I said make sure you subscribe but also
you’ve switched on that notification button. And I will see you later in
the week for lifestyle love.

Only registered users can comment.

  1. Excellent Video! Thank you so much for your Helpful and Informative Advice, Very kind of you Ma'am I Absolutely Appreciate it! 👍👍⭐⭐⭐⭐❤👏😊

  2. You are gold Canna, read my mind, this is just what i needed. Im also going to watch your single parents video for tips!

  3. I completely agree that if you have kids you need more in the emergency account. Similarly, if you have pets you should always have an extra couple of thousand, and more as they age.

    Canna, I am interested to know whether you think it is a good idea to sock a lot extra into the mortgage and use this in case of a really expensive emergency. I have an emergency account but also feel that being able to access a huge amount of redraw makes me feel we can face anything that comes our way. In 2016 we had a major house fire and I can say for certain that being debt-free was a life-saver as far as cash flow (I had insurance too of course). Being ahead on the mortgage meant I was able to forgo payments whilst the house was being rebuilt.

    Heading for mortgage-free in 2020 and that will bring more peace of mind than anything else could 🙂

    Madeleine

  4. We use a credit card for most of pur groceries and always pay it off right at the end of the month. That way we get Miles and they add up quickly. That works doesn’t it?

  5. Hi Canna, we love your videos and your helpful advices. Already downloaded your app, but unfortunately some costs add up twice in the monthly expenses. Also tried it on another device, but the wizared froze 😢 Any fixes planned soon? Su

  6. Hi Canna, such a great video! Would it be a similar concept for paying off debt? Or do you recommend putting money aside for the emergency fund while paying off the debt? Thank you xx

  7. Thanks for the informations. In germany we pay for each account money monthly. So I will Start maybe with one extra account

  8. Canna I've watched every one of your videos since the beginning and this one is my favourite. I've been using the Barefoot Investor budget for the past year or so and while it's been really helpful, I still sometimes get confused over what money goes where and end up over spending. This is such a simple method and I'll definitely try it out!

  9. I love your term ‘ banking ritual’ . One little note: Letting the saving for investment amount be flexible is a slippery slope. I allow myself reducing it once then again the next month and I end up with nothing to make me financially free.

  10. Canna, I love your videos and they are really helpful but it’s kind of disappointing that a lot of us who paid for the app are not able to use it because it crashes every time. I downloaded it about a month ago and I noticed there’s reviews and comments from people having the same issues back in April. I would love to use the app, can you give us any updates or let us know what’s going on?

  11. Dear Canna, excellent video! Many thanks for explaining it so crystal clearly 👍 Please can you do a video on how to track daily & monthly expenses using various formats, ie low tech (on paper) and high tech (digital spreadsheet or app) so we can customise a format that will work for each individual? Thanks heaps in advance, you’re a superstar! 🙏

  12. OMG I thought I had all this figured out already, but seeing it written down is eye-opening – buying only one Chanel bag per year still takes 500€ per month. I am a visual learner and it really helps when you explain things this way.

  13. This is really similar to the bucket system from the barefoot investor, except the 'lifestyle' account would be a debit instead of savings account. You know it's good advice when it's coming from two respected sources!

  14. Thank you so much for this video. Ive made the decision to get on top of my finances and was lost and didn't know how or where to start. This is perfect and am so excited to get on top of thing for myself and my two children.

  15. We have a mortgage so we put all our money on the mortgage to help bring the interest down. We then put all our expenses on the credit card (paying it before it is due, no interest). And use our redraw on the mortgage to pay off the credit card. The only thing is I’m finding it very hard to manage our spending that way as I don’t actually feel like I know how we are tracking budget wise. What are your thoughts on this?

    On a side note I used to monitor our spending with an excel spreadsheet and a pivot table but I have a baby and no time for that now! It was so much data entry.

  16. Hi Cana, thank you for your videos! If is not possible (or difficult) to open four different bank accounts, what is the simplest way to manage the finances in the same way you describe in the video? Thank you!

  17. I love all your tips in your videos. Thank you and I am going to apply them in my finances. I love the simplicity of the steps.

  18. Hi Canna, love your channel. I'm a single parent and am self employed with my own gardening business. I get a bit of financial help from the government (I'm in the UK), but I'm just wondering if you have any knowledge of running business accounts, paying yourself out of it etc. A finance video on self employment would be great. Thanks. Jackie.xx

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