Financial Planning & Personal Finance Tips - Genisys® Credit Union

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Tips to Fix Your Finances – No Envelopes Required

on 9/26/2018

Happy Couple holding a piggy bankYou’ve heard it from a million places:

•   Budget your money!
•   Make a firm plan and stick with it.  

Maybe you have inconsistent cash flow and you feel constricted by a budget.   Or the thought of keeping cash in separate envelopes takes too much planning and makes you feel like you can’t have a life. 

Whatever the reason, even though it may be difficult, the answer isn’t to give up on budgeting. It might just require a different approach to budgeting: cash flow focus.

A cash flow focus strategy is very simple and used by most businesses. They pay their fixed costs, and whatever is left is used to grow the business. You can manage your finances the same way. 

Just follow these four steps:

1. Automate your savings

Even if you disregard everything else in this blog, implementing this one tip can be life-changing.  Figure out how much of your income you can save, then take that out as soon as you get paid. 

Make it easy simply by setting up monthly transfers from your checking account to your savings account

As the saying goes, pay yourself first. This savings provides you the flexibility to cover big expenses or make major purchases on your schedule. It’s the single most important step in any budget, but it’s even more important with cash flow budgeting.

When you automate your savings, you remove the money you saved from consideration. You can’t spend it; you’ve already spent it on savings. The importance of this kind of savings will become clearer once you see this budget in action.

2. Pay your needs and your priorities

Make a list of your essential expenses or needs each month.

  • Rent or house payment
  • car loan
  • utilities
  • student loans
  • insurance and other necessary expenses

These are your “fixed costs.” They get paid after you make your savings contributions.

Next, make a list of your priorities and include your

  • charitable contributions
  • vacation saving
  • retirement account contributions

These are your “growth expenses.” They get paid after your fixed costs.

If you don’t have enough money to pay these bills, you don’t need a better budget. You need to lower those bills or increase your income. No amount of spreadsheet magic will change that bottom line.

It may be helpful to automate savings for these expenses, too. That way, you never get caught short on these bills.

3. Spend some of the leftovers

This may sound peculiar for personal finance advice. Remember, though that you’ve already automated your savings. What you’re spending here is the leftovers – the extra that’s left at the end of the month.

Spend this money however you like – just keep track of how much you’ve spent so you don’t accidentally overdraft your account. 

This approach allows you to go out or indulge in a latte. You don’t have to worry about including it in your budget.   If you know there’s a big outing with friends coming before you get paid again, you may want to save some money for that. You don’t need to say that you can’t go because you didn’t budget for it.

4. Roll over what’s left

You don’t have to spend it all. If you have money left over at the end of the month, then you have more to spend the next month if you have slightly higher expenses. 

Your spending will change from month to month, as might your income. So long as you keep the former smaller than the latter in the long run, you’ll be fine.

That’s what cash flow budgeting is about: flexibility. You can spend when you have money and save for when you don’t – no envelopes required.


If you’re thinking about adopting a cash flow budget, contact us with any questions you may have.  A friendly, knowledgeable representative can walk you through the savings tools you need. You can automate your savings, flex your spending, and build toward financial security.

© Genisys Credit Union and, 2018.  Unauthorized use and/or duplication of this material without express and written permission from this site’s author and/or owner is strictly prohibited.  Excerpts and links may be used, provided that full and clear credit is given to Genisys Credit Union and with appropriate and specific direction to the original content.



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