Ep. 42 | Cash Flow, Step by Step: How the System Actually Works

If cash flow still feels confusing, this episode fills in the gaps. Tré Bynoe, CFP, CIM, walks through his real-life cash flow system from January to December—account by account, decision by decision.

This is a practical breakdown of how to separate spending from income, handle irregular pay, and avoid constant budgeting without losing control. It’s designed for people who want structure without spreadsheets taking over their lives. (Although there's nothing wrong with spreadsheets!)

You’ll learn:

• How to set up core accounts and what each one is for
• Why annual costs matter more than monthly guessing
• How groceries, eating out, and spending money actually work
• What to do with bonuses, raises, and uneven income
• How this system makes saving automatic and stress lower

🎧 Follow, review, and share the show if you want money decisions to feel simpler.

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Transcript

Tre 0:00

Hello and welcome to the Plain English Finance Podcast. I'm your host, Tre Bynoe. This podcast is dedicated to helping you make smart financial decisions. So this episode is on cashflow management again. So I've had a few people where I've sent my episode two,'cause they asked me about cash flow management. I send the episode, then they come back with a few questions. So. I don't know what I did, we did something wrong in this episode so we are going to,

Sierra 0:25

Is it the same questions?

Tre 0:27

Similar type of questions and for some other people they haven't been able to get a key part of it.

Sierra 0:32

Okay.

Tre 0:33

So we are actually going to go through the process of what happens throughout the year.

Sierra 0:39

Okay.

Tre 0:40

If that makes sense. So we just,'cause it's January now when we're recording this. We're gonna kind of go through the items on our list.

Sierra 0:48

Mm-hmm.

Tre 0:49

So people have an idea of what we put into which accounts.'cause I get questions about clothing and I get like questions like that. So

Sierra 0:57

Yeah.

Tre 0:59

And a lot of it comes back to the system is what it is and you make what it is anyway. Okay. So

Sierra 1:07

yes,

Tre 1:08

when, so January, in January we sit down and we create our. What's gonna go into our house account?

Sierra 1:16

Mm-hmm.

Tre 1:17

So we have five accounts. We have the income account, we have your spending account, we have my spending account, we have the house account, and then we have the groceries.

Sierra 1:29

Okay.

Tre 1:30

Okay. Those are the five accounts and get lots of questions about where you have these accounts. So for us, we found that groceries is the hardest thing for us to. To control. I refuse to keep track and write down in a journal how much I'm spending on groceries or anything like that. It needs to be an easier way for me and not putting that much time and effort into keeping my budgeting on track. Yeah. So we have, the cost of that is we have an account, so we have a prepaid MasterCard. That's where our food budget goes. Mm-hmm. Okay. What we set aside food.

Sierra 2:10

So we, sorry, I'm just gonna give a little more information so that one I transfer into that prepaid MasterCard every two weeks. That's how we do it.

Tre 2:19

Yeah.

Sierra 2:20

So,

Tre 2:20

oh, you did, you said it's twice a month. You thought it was two weeks and then we did the budget around two weeks and then, then you're like, turns out it was,

Sierra 2:28

you're on.

Tre 2:28

I'm like, you was doing it on the 15th or the first And that's month. Isn't that every two

Sierra 2:31

weeks?

Tre 2:32

Yeah. So

Sierra 2:32

I don't know,

Tre 2:33

twice a month is what you, how often you do it, but it doesn't, it doesn't really matter how often it is. We, that's what makes sense for us. Yep. For you mainly

Sierra 2:43

I just, yeah, I like to give those small details because when I'm learning something I like to know exactly. How other people are doing it, I

Tre 2:51

guess.

Sierra 2:51

Okay.

Tre 2:52

Yeah, fair enough.

Sierra 2:52

That's why I'm adding

Tre 2:53

it. We'll go through that, but yeah. Okay. Fair enough. So that, yeah, so they're the, they're the five accounts and then the house account is, we'll go through what we put into there. Then we have your spending, my spending and the income account. The income account is where all of our income goes into, basically. Yep. And the principle behind this cashflow management system is that your income does not dictate what your spending is. Yeah. Is the principle behind it. So no matter. No matter how you are doing it, if you're doing it differently or whatever, that is the core principle that you're trying to achieve.

Sierra 3:26

Yeah. Do you think people understand what that means? Like when you say it?

Tre 3:32

Clearly not.'cause you wouldn't be asking me the question otherwise.

Sierra 3:34

The only reason is because I've heard others in our circle ask you more about that. I don't know if they're connecting it,

Tre 3:42

why it's so important.

Sierra 3:43

Not even that. Just what does that mean?

Tre 3:46

Okay. It means that. No matter what your income is during the course of the year, or how lumpy your income is or anything like that, that your spending doesn't have to change because of that.

Sierra 4:03

Right.

Tre 4:04

Because ultimately if you're spending based on your income, you can always spend more. There is always an element of. If I just had more, I would be happy. Right? You, you don't build contentment and content. Contentment is the key, the absolute key to financial success. If you are not content, you will always want more, which means you, you'll never be content, you'll never be happy,

Sierra 4:38

you'll never have enough money,

Tre 4:40

you'll never have enough because it doesn't matter how much you have. You always want more.

Sierra 4:45

Yeah.

Tre 4:45

So building contentment, funded contentment is, should be the goal of personal finances. It shouldn't be they, they say most people when they say, I wanna be a millionaire. They actually want to spend a million dollars, which is the complete opposite of being a millionaire.

Sierra 5:01

Yeah.

Tre 5:02

A, a millionaire means that you have a million dollars and you have not spent it.

Sierra 5:06

Yeah.

Tre 5:08

If you have, if you are not a millionaire, if you've spent a million dollars, that's,

Sierra 5:11

you're, you're either in debt,

Tre 5:13

opposite debt, the complete opposite of a millionaire. So the goal is to live life and be happy with what you are spending. Be content.

Sierra 5:21

Yeah.

Tre 5:22

Okay. So when you say, so your income is not defined, your expenses is not defined by your income.

Sierra 5:27

So yeah, when you say your expenses are not defined by your income, you're saying figure out how much it costs for you to live the way you wanna live. And then if your income is fluctuating, don't just. Make these quick rash decisions like, oh, I just got a bonus. Oh my, I got a raise so now I can go buy that car I wanted. Now I can go do this. It's like slow down that decision making process.

Tre 5:55

Yeah, so that's why we do it once a year.

Sierra 5:57

Yeah.

Tre 5:57

So we do it in January. If our income jumps in March, that extra income that's put away.

Sierra 6:06

Mm-hmm.

Tre 6:06

When is it put away? Till next January where we sit down and we decide. What it's going to be.

Sierra 6:13

Yep.

Tre 6:13

Okay. Sounds easier. Maybe it doesn't sound easy. I dunno. I dunno.

Sierra 6:19

Like anything, it makes sense, but it's hard to do in practice.

Tre 6:22

Yeah. So I'm gonna keep, I'm gonna go through what's on our list that goes from our income account into our house account. Okay. So we have your car insurance, we have my car insurance. We then have our grocery budget. We have fuel costs, so we know that just to live our life, not, this isn't included in any big travel or anything like that, just to live our life. We fill up about once a week, we have two vehicles and they pretty much alternate the weeks that they fill up. So we have a tank of gas, so$70 x 52. It is that simple. 52 weeks in the year. That's the amount that we set aside. And when we are doing all this, it's all annualized. It's the annual amount. That's the only thing that matters. It doesn't matter when you pay or how much or how often. The annual amount is what's important. Then we have utilities. So we went through, you can log in to, because you do the bill payments for the utilities. Yeah. So you just log into,

Sierra 7:26

yeah, you can log into the City of Saskatoon, like your e-bill, um, and it'll show you, like for the. Yeah. Totals of the year. So I just calculated, I figured out exactly what we spent last year for our bills, which I've never done that before. I've before. I was saying just off, we

Tre 7:45

think it's about this, so,

Sierra 7:46

well we, I would always guess high.

Tre 7:48

Mm-hmm.

Sierra 7:48

You know, I would remember how much. I was paying and say let's say it was around$300, I would say to you, uh, put it at$350. Put it at$350, aim higher if we have money left over. Great kind of thing. But this definitely in the past few years, the bills have gone up like everything else in this world. So I wanted to have a really good idea this year. So I just logged in. You can do it through SaskEnergy as well.

Tre 8:14

Okay, so you would log in, you would calculate it for how long?

Sierra 8:17

The year. The year.

Tre 8:19

I don't care that it's slower in some do it for the year.

Sierra 8:22

Yeah.

Tre 8:22

Then we have our internet, we have our, your phone bill. My phone bill. We have charitable contributions that we do on a regular basis. We have streaming services. We have like Netflix and Disney and Amazon Prime, things like that. We then have life insurances, so we have. Our joint last to die policy. We have our individual policies, we have disability insurance. We then have our music, our Spotify, we have Seika's food. Again, this is all annualized and it doesn't, it's not, we get as accurate as we can do, right? Mm-hmm. We have a Costco membership, our Collabria, that's our credit card. Cost, like annual cost. We have the cleaner cost. We have Ariyah's money, so I say five accounts. We have additional ones. So for example, we have a sixth one that's called Ariyah, and that's where we put money in for Ariyah's stuff.

Sierra 9:21

Yep.

Tre 9:22

Every month. Like that's. And then when it gets to a certain level, I take money out of that and I put it into her little portfolio that she has for her.

Sierra 9:30

Yeah.

Tre 9:30

Um, which, if she's listened to this in the future, doesn't mean that it's your money. It's my money and your mom's money that we have put aside to use if we choose to on you. Being bad? Maybe won't be for you. Who knows?

Sierra 9:44

That is like far in the future.

Tre 9:46

Maybe it's a great vacation. I don't know.

Sierra 9:49

For me and your dad.

Tre 9:50

What are your grades like? Okay, uh, come back. So, then our spending money. So that's, that's what's in, that's what's in our, the house account. And then we have that annualized. So for ease sake, I'm gonna say, oh no. One thing I didn't put off there. The mortgage, the property tax, we bundle it all in together as just like a housing cost. But you need to in this, in this house account that you're putting that stuff as well. And this is the, basically the totality of your cost of living.

Sierra 10:24

Mm-hmm.

Tre 10:24

You'll notice that there isn't an eating out fund. Because the eating out is part of the grocery or food budget.

Sierra 10:32

Yeah.

Tre 10:32

Because there needs to be a trade off between,'cause what do people say when they're saying save money? They say, well if you do just, if you'd stop eating out you, they buy groceries. Well, That's the reason that the eating out budget is the same as the grocery budget.

Sierra 10:44

Yeah.

Tre 10:45

Because when it comes to us making a decision about whether we are going to eat out or what we're doing. There has to be an immediate trade off.

Sierra 10:52

Mm-hmm.

Tre 10:53

So if there's not the money, if we have, we put in every two weeks or whatever, and there's times we get to, especially recently, that's why we've increased it for this year, for 2026, but sometimes there won't be enough for us to do what we wanted. If I had it my way, we'd eat out all the time. Right. It's like there's no end to it. What, what? Where's the limit? Where's the, how much is when do you say Enough is enough? We make that decision instead of that decision being because. Well, I dunno why people would not eat, I guess a lot of people will not, will think for themselves, it's a waste of money or something

Sierra 11:26

to eat out.

Tre 11:27

Yeah. When in reality they don't actually know. Can you afford it? Can you not afford it? This is an easy way for us to know whether we can afford it or not.

Sierra 11:33

Yeah,

Tre 11:34

right. Have the money there. It's in the prepaid MasterCard. We want to do it. We look at it and we either have the money or we don't have the money. It's very simple. And then if we want to spend in addition to that, it comes from where.

Sierra 11:47

Our own personal spending.

Tre 11:49

Right. And we get the same spending money. That's what we've decided. Each couple can do it differently. It's up to them. Yeah. But we get the same spending money for you get the same as I get the same. That's how we do it. So let's say for argument's sake that for easy math,$10,000 a month is what it costs. You notice we haven't spoken about income yet.

Sierra 12:09

Mm-hmm.

Tre 12:10

Because it's completely irrelevant to the way that. The cashflow system works. Right? I don't wanna say budget'cause people think of budgeting as very specific. And yes, because it's completely irrelevant. So we build this, so then we get to$120,000 for the year. Let's say I'm paid once a year. How much needs to go into the house account?$120,000. Let's say I'm paid three times a year. Guess how much needs to go into the household account? Four, I wanna say$400,000, but I need to check that. 400 thou. Four$40,000, sorry.

Sierra 12:47

4, 8, 12.

Tre 12:48

Yeah. Yeah.$40,000. That needs to go into the house account. It doesn't matter how often I get paid. I know over the course of the year, I need to put$120,000 into. That house account.

Sierra 12:59

So then most people, if they're an employee, get paid every, every two weeks, or is it twice a month?

Tre 13:06

Doesn't, that's the thing. It doesn't matter.

Sierra 13:08

You just find out that number. You take the annual cost, the 120,000, you divide it by the amount of times you get paid.

Tre 13:17

If that's how you choose to do it or

Sierra 13:19

Do it every month. Do it..

Tre 13:21

It doesn't matter. Yeah, that's the important thing. We choose to do it monthly. And that might change. Because if my pay, the way that I get paid changes, it might be quarterly that we do. But it doesn't change the, it doesn't change the way, it doesn't change the system. Right. Yeah. The system is the system.

Sierra 13:38

Yeah.

Tre 13:38

Okay. So that's how, that's what goes into the house account. That is the only stuff that we record the cost of. That's it. I don't go back and double check to see whether, the utilities were$390 or like, no, the that's what it is. That's how it's left. There's no vehicle repairs in there. There's no, there's none of that type of stuff. You're responsible for a vehicle and you have to get the pay for the oil changes on the vehicle. I'm responsible for a vehicle and that comes from our spending.

Sierra 14:09

Yeah,

Tre 14:09

I have to pay for the oil changes on said vehicle, but the aside from that. Everything else that could potentially come up, like people would talk about like an emergency fund, things like that. That all comes from the emergency fund that's set up, the portfolio that's set up that isn't from this money. Yeah, and I also don't put aside a little bit each paycheck for those items. Yeah. Once you get to the point that you have enough for those items, you stop saving for those items. It's not about those items. You're not saving for those items anymore. Yeah. It's simply a case of this$120,000. It's what we spend. No more, no less if there's money accruing in our spending account, I don't go take that money and then go and invest it or anything like that. That money is. To be spent because it's a decision that we have made. If we want to, whatever we wanna do with it, it's money to be spent because there is a balance to be had when it comes to personal finances and especially for people like us where I would save until the cows come home. If you gave me half a chance, it's you have to in this way that I forcibly get myself not to do that. Where it's like, okay. Don't just save everything you like. There is a transition point. It's okay to spend more on certain things. Right. If it is even if it's not a hundred percent valuable to you, money's not, don't, it's not designed to be hoarded. It's like,

Sierra 15:34

yeah.

Tre 15:34

Otherwise you'll always be stressed about money. I guess. It's, it's a balancing act. Okay.

Sierra 15:38

Yeah.

Tre 15:38

So that's, that's what we do at the beginning of the year.

Sierra 15:42

Okay. I wanted to say something real quick about, so a couple of things for. Grocery and eating out. I feel like those variable amounts, maybe I already mentioned this in the last episode, but those are harder for people to wrap their head around. It's like, oh, Netflix costs 9 99. Write that down. But then when you're deciding like you are the decision maker, sometimes I feel like people don't like to put a number on it because in those situations where they've used up all their food account. Their friend.

Tre 16:16

You mean add accountability?

Sierra 16:17

Yes.

Tre 16:17

Like accountability. Yeah.

Sierra 16:18

Because, because then a friend comes and says, Hey, let's go to the keg. And you're like, oh, I only have$21 and 33 cents in my food account. Oh. I'll just add more, or I'll just do this. You do have that option, but it comes from your spending and then,

Tre 16:32

mm-hmm.

Sierra 16:33

At some point you have to, you cap it, you say.$400 or whatever is the cap for this period of time. And then you stick to that. And if you're not sticking to it consistently, you either need to re-look at what you're buying, how much you're eating out, or maybe you don't have enough going in for your lifestyle, like the way you want to live. You can always change that. It's not like you always say, it's not about being the cheapest or being frugal all the time, or being like that, that mentality, it's just about. Being disciplined.

Tre 17:08

And you have to, this, I, I find this structure helps reduce the consequences of discipline or lack of discipline.

Sierra 17:18

Mm-hmm.

Tre 17:18

Because instead of the lack of discipline bleeding into every aspect of your life, you can see it straight away. Mm-hmm. And in order for you to make a different decision, you have to break your habits and break the structure. If I wanted to go, let's say we're putting aside.$500 for groceries, and I wanted to go spend$700. I would have to physically go in and transfer an extra$200 from my spending to the grocery account in order for me to. To do that. Mm-hmm. Right. There's a, there's an action required for me to break the budget that I have set.

Sierra 17:55

Yep.

Tre 17:56

Okay.

Sierra 17:56

Yep.

Tre 17:56

And that's the, that's the important, that was why, that's what this whole thing is built around, is making the right thing to do easy. Yeah.'cause I refuse to spend the amount of time that some people spend budgeting.

Sierra 18:08

Mm-hmm.

Tre 18:09

I refuse. I'm not doing it. I have better things to do with my life than keep receipts and track them in a book and track like. No, that it is just not what I wanna do. So this is, and the trade off of that is that's, this is what I've, this is what we do. This is the, this is what we've come up with. This is an easy way to do it. Yeah. So, okay. We sit down, do that once a year, and that's where you and I'll talk about those individual items. Okay. So then let's say for instance, somebody is paid weekly. Okay. We have decided as of right now, this money is transferred. So let's say it was$120,000. This$10,000 is transferred on the last day of the month. Okay? Every single day of the last day of the month, all of our income goes into the income account. Yeah. How often you get paid or anything doesn't matter. Okay? So we decided once a month that's what's gonna happen. So on the last day of the month. All the money has been accumulating from our income into this income account. We left it, don't touch it, don't have anything to do with it. On the last day of the month, that$10,000 gets transferred from the income account into the house account. Okay. And then there is an automatic transfer again from the house account into our spending accounts. So, and you can set that timeframe to be whatever. They are two separate transactions if you choose that you want weekly spending money. Set it to weekly. If you want biweekly spending money, set it to biweekly.

Sierra 19:40

Yep.

Tre 19:41

If you want, if you want quarterly, it doesn't matter. The point is that those are two separate transactions on the first of the month. It means that I can go into that income account and I can transfer every penny of that into my investment portfolio.

Sierra 19:57

Yep.

Tre 19:57

Because everything else is to be.

Sierra 20:00

Is taken

Tre 20:01

is everything is taken care of.

Sierra 20:03

Yeah.

Tre 20:03

That is the, the beauty of doing it the way that we do it.

Sierra 20:08

Yeah. So instead of people who trying to figure out how much should I save? What's 10% of my income? I've heard lots of people

Tre 20:15

Yeah.

Sierra 20:15

People use those numbers. You've got a system that you know exactly how much it costs to live, exactly what you wanna do for the year, everything else is saved. And that is gonna build your net worth versus, cash sitting around and things like that. Or

Tre 20:31

It stops a lot of the issues that people will come back and they'll be like, oh, what do I do if this happens? And what do I do if my cash builds out? What do I do? Like, it's already answered by the, the system answers it, right? Yeah. And it doesn't mean, I wanna say this doesn't mean that you can't, then we can't then go and break this, right? Like we can't, if we choose, if we set a set amount for our spending money and we decide that we want to go on a really big trip or whatever, it doesn't mean that we can't go spend more. But where that comes from, it's from the portfolio.

Sierra 20:59

Yeah.

Tre 20:59

And that means that then, that's now a discussion that we are having. Because we determine what we are doing there. If the vehicle has a significant breakdown or we have to buy a new vehicle. We just had to buy a new vehicle.

Sierra 21:11

Yeah.

Tre 21:11

That didn't come from the spending money. Yeah. That came from the portfolio. Yeah. We are not saving for those things anymore.

Sierra 21:19

Oh, yes. Okay. Sorry. That was another thing I wanted to mention while you were talking is the saving for things because I, I also feel like. I almost said normal people. It's probably true, is normal. No, but for me, I remember when we got Seika I was thinking about pet insurance. Uh, what her vet bills, what if this happens, what if that happens? And I said, I wanna open an account and just start putting money in for Seika in case something happens. And I remember you saying. We're not doing that. We're just going to invest it. And if we need it, we'll just take it from the portfolio. And I was like, oh, yeah, that makes sense. But in my mind, I like to have my, I'm gonna use like my own, I want my external world, organized. I prefer it. Your internal world is a lot more organized than mine, so I need. My external world to be more organized. So when I look at accounts, I'm like, I want it to say like. Seese's spending, Seika's emergency

Tre 22:25

Vet bill.

Sierra 22:26

Yeah. I'm like, I wanna list,

Tre 22:27

I know, I know plenty of people. I have clients that like that as well.

Sierra 22:30

See that's, and that's why I'm saying it because I, I feel you. I understand, but it does make sense to do it this way. It's

Tre 22:37

just, well, what can happen is you end up having too much cash.

Sierra 22:40

Yeah. And it

Tre 22:41

takes that like

Sierra 22:41

mental load too.

Tre 22:42

Yeah.'cause at what point do you stop putting money aside? Let's say you decide to put money aside for that. And that's why with the Ariyah's account.

Sierra 22:49

Yeah,

Tre 22:50

I, if that account goes over$1,500, I transfer it down to about a thousand dollars. And that money goes into her long term. Yeah. Her portfolio. Yeah, because, and then guess what? If something comes up that we need more than that, I'll go into that long term portfolio and just take it outta that. Right? Like it's, it is, there has to be a limit. At what point do you say Enough is enough?

Sierra 23:12

Yeah.

Tre 23:12

So. The way that this system is set up, it means that you won't constantly be having tons of cash laying around. If you choose to have an emergency fund at your bank and you choose, it's three months exp, let's say let's use the$120,000 and you say three months. Cost. It's$10,000 a month. I know my emergency fund needs to be$30,000.

Sierra 23:34

Yep.

Tre 23:34

I'm going to take$30,000 and I'm gonna put it in a savings account and I'm gonna stop adding to it.

Sierra 23:40

Yeah.

Tre 23:41

I'm not gonna keep on adding to it until it's sixty, eighty, a hundred and twenty. And then you have Tre, like, what are you doing?

Sierra 23:48

And you're like,

Tre 23:48

Do you know how much that would've

Sierra 23:50

Now no emergency can get me. I'm so prepared. That's me.

Tre 23:54

Like what emergency could possibly have, even if you have the portfolio and it halves in value. You still have the money there, like we have a line of like this, the emergency, this magical emergency that people are thinking of often never happens. You need a, an amount for sure, but you do not need a hundred,$150,000 of cash. Sitting there.

Sierra 24:16

Yep.

Tre 24:16

You don't need it.

Sierra 24:17

You have other options.

Tre 24:19

Look way better options. In fact, that's probably one of the worst options that you could pick.

Sierra 24:23

I feel like our friends always say everyone needs a Tre in their life because it's true. I feel like we get stuck in these thought patterns.'cause I would totally do that. I would

Tre 24:35

Oh, absolutely. You would do that. Yeah. You already tried to do that.

Sierra 24:37

I know. I feel like I fight you on the budget sometimes.

Tre 24:43

And have we, once we been married 11 years now, 12 years?

Sierra 24:47

Uh, it'll be 12, I think

Tre 24:49

coming up to 12 years.

Sierra 24:50

I can't remember actually. I'm like, what year?

Tre 24:52

Just me.

Sierra 24:53

What year are we in? Um,

Tre 24:54

almost 12 years. Ever once. Have we ever needed the emergency fund, the size that you would like it? No, we have not.

Sierra 25:04

Recently, I had a savings account that I had set aside, and Tre made me do the math because I, I thought. What if we go on vacation? What if I need this? What if this happens? So I'm just gonna leave that cash there. And Tre made me do the math for,'cause it was over a year, it might have been two years.

Tre 25:25

It was longer than that. It was like, it might have been longer, four years. It was a long time.

Sierra 25:30

And then he made me do the math as to what I would've earned. But not just that, because it would also have been compounding and I. Wanted to puke, so I immediately invested that.

Tre 25:43

Okay, fine. I'll do it.

Sierra 25:45

So, and look, we haven't gone on vacation yet, so at least I made a little bit.

Tre 25:51

And then when we do again, we are going on vacation. Hopefully nothing bad happens and, but when this comes out, probably I should be on vacation maybe. Yeah, you'll be, yeah. Um, but that is, part of that is, again, that's a, this is a good example of an expense that wasn't in this.'cause you notice there's no vacation travels and stuff. Yeah. So for this vacation, we are gonna pay half of it from my spending money and half of it from the portfolio. The portfolio isn't, and I have this conversation a lot with people, a lot of people think that the money that they put aside to invest. Is only for retirement. And yes, that is, you need to think long term, especially when you are buying equity and you're buying stocks and you buy, like you're buying, that type of thing. You have to be, you have to understand that it could drop tomorrow and it could take four years, five years for it to recover.

Sierra 26:38

Yeah. It's not a checking account.

Tre 26:40

No, it's not a checking account. Yeah. But when your, when your financial life is in order, you can be opportunistic. Like the markets are up. I, we want to spend the money. We will go in and take the money out and spend it. When markets are up, we wanna buy a vehicle, we gotta take the money out and buy the vehicle. The issue is that you need to have a plan for what you're gonna do if the markets aren't up. So what I don't like to see is somebody in a position where if they, they don't have enough cash, that if the market are down, they don't have another option.

Sierra 27:14

Yeah.

Tre 27:15

So for us, for instance, if the markets were down, I would, and we wanted to go on vacation, I would not put the money from the income account into the portfolio for a month.

Sierra 27:27

Yeah.

Tre 27:28

For two months, whatever we needed in order to just have a little bit of extra cash around. That's our plan for if that, when that happens.'cause it'll happen eventually. You just need a plan. Right. And, and this structure helps us do that. So as I said, we get paid at whatever point throughout the month. From the last day of the month, money goes in from the income account into the house account. On the first of the month, money is transferred from the income account to the portfolio.

Sierra 27:58

Yep.

Tre 27:59

Then the MasterCard bill comes. So the MasterCard bill, we, well, I go through it every single month. Seese pays the utility bills, which are now automatic, but Seese pays the utility bills.

Sierra 28:10

Somebody drew the straw

Tre 28:12

And I go through the credit card statement. And when I'm going through the credit card statement, I have these accounts in the columns. So I'll download it to Excel and I'll have Tre spending, Seese spending, house, Ariyah,

Sierra 28:31

joint

Tre 28:32

joints, joint stuff. Yeah. And that's what I do. And then I'll put, I'll go through the list of the credit card statement and I'll just put them into the right columns. So most of the stuff that's in the house is gonna be the list of the items that are. Like reoccurring, like the Netflix and like stuff like that. That's

Sierra 28:48

on the card.

Tre 28:49

On the card.

Sierra 28:49

Or like I just, just signed up for the gym. So then that will be, and that's through the MasterCard. So now that will be on there. And that's a recurring thing. Yeah. But it'll just go to me.

Tre 28:57

Yeah. So on. I will, and I will just go through the list. When we go through the Amazon bill, we'll just go through and I'll put it into the columns. If it's for the house, we're at the point where we don't really discuss those type of things. It's just like we have an idea. We are on everybody's accounts. You kind of see, but that will go into like joint stuff. So if it's what, I don't know, a set of dishes, it would just go into the joint column and then I would add half the joint column to Seese's suspending half the joint column to Tre's spending and them dollar figures, I'll then text Seese that dollar figure and she will,'cause I want her to be involved in some capacity. I could just do it myself, but I do not, I try not to anyway.

Sierra 29:33

And then I reply with the skull emoji every single time he sends me the number. It's like I hate that time of month,

Tre 29:39

MasterCard time. Um, and then we just transfer that dollar figure from said account in back into the income account. And I pay the MasterCard bill from the income account.

Sierra 29:51

Yeah. Outta the whole budget. I feel like that is the most tedious.

Tre 29:56

Yeah. And part of it is, there are ways that I could simplify it, but you should be going through your credit card statement every single month. Yeah. And I think that,'cause I've thought about it and ultimately I just think that the pros of doing it from multiple angles drastically outweighs the cons.

Sierra 30:15

Yeah.

Tre 30:15

Takes me 15 minutes a month to do it.

Sierra 30:19

Yeah.

Tre 30:20

Definitely the most annoying part.

Sierra 30:21

Yeah.

Tre 30:22

But we could simplify it. We could just add like direct MasterCard to each accounts. Right. And like where you can just have like debit credit cards and stuff and just do it that way and just have'em automatically come outta the accounts. And you could do that. You could absolutely do that. It's just, I like the points. It's a good habit to get into.

Sierra 30:41

Yeah.

Tre 30:42

Keeps you on top of it. And while I don't think about money all the time or anything like that for our budget. It just means that you kind of have an idea, you have a better idea than if I truly did nothing to do with finances every single month. But that's all I do. So that's the, that's the part that I, we do monthly. I do monthly. That's it. That's, and then life just ticks on.

Sierra 31:03

Mm-hmm.

Tre 31:04

Um, and then the money that goes into the portfolio. Now, I do not do this. Because I'm a financial planner, so I wouldn't recommend, I would say I would, what I would say people do for that is if you have room in your TFSA, you shove it in there and you get it invested. If you don't have room in your TFSA, you start an unregistered account and you just get it invested. And then once a year you sit down and you figure out what contributions you're gonna make to your RSPs, what, like what contributions you're gonna make to your RESPs. Whatever it is you then make that decision from there. Because what I really don't, what I really hate seeing even like RESPs and things like that, is if you do not have as an individual, if you do not have enough cash available, like available money to you, you will feel broke no matter how much, no matter how much you have in retirement savings, if you can't access any of it without consequence. You're gonna feel close to the edge. So I would much rather just categorically, it stops the whole, what do I do with this money? Do I invest this way or that way? It's like you have an investment philosophy, you stick to it, you put the money in there as regularly, as often as possible. But we do it once a month. That's it. Yeah, there's no mid month. There's no none of that. Just we do it once a month. It doesn't matter how often we get paid, so money will sit there. If I get paid on the third of the month, money will sit there for a while or whatever. Fortunately, we've figured out, so it's like pretty, doesn't sit there for long, but that's not the important thing. And the important thing is it's just, it's like clockwork. It's the same.

Sierra 32:45

Yeah,

Tre 32:46

same thing.

Sierra 32:46

I was just gonna say one more thing about that, because I could see people saying, well, what about if I get paid quarterly and my car insurance, my, this, my everything's coming out in January. I don't have the money available. What would you say to that?

Tre 33:02

Sucks to suck. No, I'd say, I would say that if that is truly the case, like everything comes out in one month.

Sierra 33:10

Yep.

Tre 33:10

Leave a buffer in there. The fact is when, when there was a,

Sierra 33:16

sorry, I just had an idea. Or maybe their year is not January to December.

Tre 33:20

It could be whenever. Really?

Sierra 33:21

Because

Tre 33:21

really like, yeah, but ideally you like we've never actually ran into this problem and I know it's like there is the potential of this problem happening and no, I lied. There was a few times and I would borrow money from the portfolio. I remember doing that in the early days where it was a lot, lot closer margins, and I would borrow money from the portfolio to put it into the. House account and then I would pay it back.

Sierra 33:44

Yeah.

Tre 33:45

So I did that a few times where I was like, okay, well I need a few thousand dollars. I would use a whole number, take 2000,$3,000, put it into the house account, and then later when the money built up, I would take it back. But I think most people can figure out a way around that. Like that you should have a little buffer, you know, like start the account with a few thousand dollars or something like that.

Sierra 34:07

Yeah.

Tre 34:08

The, the point is not to. Be perfect. The point is to be consistent and systematic.

Sierra 34:14

Yep.

Tre 34:15

It, if there is a few thousand dollars more than you really need in your house account, there's bigger issues going on in the world. You know, like

Sierra 34:24

Yeah.

Tre 34:24

So what? It's not the end of the world.

Sierra 34:26

Don't fret boat that cash.

Tre 34:28

Yeah.

Sierra 34:29

Being sitting there

Tre 34:29

because so yeah. So what that cash is there. You Okay, move on. Like what I will do is every January I'll take a look and see what's in the house account and. I'll get an idea, but truthfully, I've never really taken money out of the house account. It kind of just sits there. Sits there and

Sierra 34:47

yeah.

Tre 34:47

I dunno. We might have a few thousand dollaRSPuffer now, but, so what? I guess,

Sierra 34:51

yeah.

Tre 34:52

I dunno. I'd rather not think about it than, yeah, try to worry about that, honestly.

Sierra 34:58

Yeah.

Tre 34:59

Bigger things to worry about.

Sierra 35:00

Okay. Quick question, unless you have more to keep going on.

Tre 35:03

No, that's, I feel like. We covered it.

Sierra 35:07

Well, I was gonna say, what are the questions people were asking? Oh, do you have specifics?

Tre 35:13

So people were asking about like your, like your clothes, like where do you spend, like where does that spending come from?

Sierra 35:20

Yeah.

Tre 35:20

And I guess I didn't touch on that. So the spending account, the spending money is yours to manage however you choose to manage it. Seese is to manage however she chooses to manage that.

Sierra 35:33

Yeah.

Tre 35:33

Part of that that includes your clothes, that includes your Starbucks. Well, no, that normally comes in there.

Sierra 35:40

It depends.

Tre 35:41

Grocery, depending.

Sierra 35:42

I don't have it very often.

Tre 35:44

No, but it like that spending money is yours to do with as you please.

Sierra 35:49

Yep.

Tre 35:49

If you choose to spend all of it on clothes, you go spend all of it on clothes. That it, that, that money, you're not settting aside extra for the clothes stuff, you know, setting aside extra for this or extra for that. Or if I wanna, I'm not a car guy, but if I wanted to buy a muffler for my car, that's part of that money, right? Like, yeah. If, let's say we, you're getting a thousand dollars a month and the piece of hardware that you wanna buy is$2,000, well then you have to save up for that piece of hardware. That's not a, there's no. You get this, and I get that. It's a case of like, this is the amount that we've set aside. It doesn't have to be even, we've chosen to do it that way. Like you do however you wanna do it. But the point is that you've set aside, you've set an amount, you have a limit, and you operate within that limit. Yeah. If you wanna, and again, it could be a case of, if we needed to replace I'd say the computers and stuff are, are business expenses because we have a, we have a added. Complexity to this, which I haven't talked about how we manage that. I've left that part out. I noticed that. But it is very, it is very, it's very, it is very similar. It's very simple. This similar type of principle. Yeah. But

Sierra 37:00

I feel like you kinda lost us, like you went on a little bit of a,

Tre 37:04

oh, sorry. Um, what I'm saying is you don't, it doesn't mean that you don't spend from the portfolio. If you need something big, it means that it's now a conversation that we have and I can never say. We didn't think about that. It just happened.

Sierra 37:18

Yeah.

Tre 37:18

Right. It's a decision that we are making instead of it just, instead of life just happening to us, it's a decision that we made.

Sierra 37:25

Yeah.

Tre 37:25

Right. Yeah. And oftentimes, if you can instill where the majority of the decisions that you're making on day to day are good decisions will lead you to good places.

Sierra 37:36

Yep.

Tre 37:36

If the majority of decisions that you're make day to day or bad decisions, it will lead you to a bad place. Mm-hmm. So the goal is to just put you on the path. Make it easier to make good decisions than it is to make bad decisions.

Sierra 37:47

Yeah,

Tre 37:48

right.

Sierra 37:48

For sure.

Tre 37:49

Okay. I think that's it. I think that is, I think that covers the structure of it, and we do the same thing every single month for the entire year, and then if there is something that you want to increase, then we'll be like, okay, we will look at that in January. Right? Yeah. Like when we added the cleaning service, it was okay, that was like middle of the year or whatever, and we're like, Hey, we'll look at that in January. And then we made the decision. It's, it's, I talk about trying to live behind what your income is.

Sierra 38:17

Mm-hmm.

Tre 38:18

And that is, that is for two reasons. It's to create that gap, but it's also to build contentment. Like if you were living life this way for the last five years, just because you've now got a pay raise doesn't mean that suddenly you need to live.

Sierra 38:31

More luxuriously.

Tre 38:32

More luxuriously. It's like, no, you could be content no matter where your income is. And that's an important thing because the, there's people out there that are earning much less than you are, whoever's listening to this much less, and they're living life contently like they're content with what they have. Yeah. So it's not about the income above a certain degree. It's about. Your mind frame and your how you view things anyway.

Sierra 39:00

Yep.

Tre 39:01

Anything else you wanna add before?

Sierra 39:03

I don't think so. This one's a little bit on the long side. I just wanted to make sure you covered everything that people were mentioning. So

Tre 39:10

It's mainly the small expenses like the car, what happens if my car, breaks down. Yeah. Take it from the portfolio. It's, the issue comes is if you are if you are. Saving everything like that's left over into RSPs or something like that, then you do not have anything left over to cover those expenses.

Sierra 39:28

To like pull from easily.

Tre 39:29

To pull from easily. So that's why I stress the importance of people building accessible, an accessible portfolio. Because if I'm doing RSP contributions, the way I do RSP contributions is very specific. It's for the biggest tax benefit that we can get. So again, it doesn't, just because we can make the RSP doesn't mean that that's where the money goes. It's a decision. These things, a decision, but you don't need to make these decisions all the time.

Sierra 39:54

Yeah.

Tre 39:54

You need to set up a system where, you know, I sit down and we make these decisions with my clients once a year. It's not a everyday decision. We, we make that decision. We take a look at their T4's and make that decision what we gonna do. But the important thing is during that year, they're still investing, they're still saving, they're still putting this money aside. Uh, they've built a system to make that happen, so,

Sierra 40:16

yep.

Tre 40:17

Anyway, that's it. Awesome. Let's cut this short.'cause the topic that I'm, this is the fundamentals. This is the, I'm telling you, if you do not master personal cash flow in some capacity, you will never be wealthy. You'll never reach it because you'll, there will be. Cannot out, you cannot outspend bad habits.

Sierra 40:35

Yeah.

Tre 40:35

You can't. Many very, uh, very high income sports professionals have, uh, been there before you trying to do the same thing, and get a lot more money

Sierra 40:43

Yeah.

Tre 40:44

and they haven't being able to do it. So you won't be able to do it either. Unlikely. Anyway. Okay, perfect. See you guys in the next one.

Sierra 40:50

Bye.

Tre 40:51

Bye. Thanks for listening to this episode of the Plain English Finance Podcast. Tre Bynoe certified Financial Planner. Chartered Investment Manager is a financial planner with TCU Wealth Management and Aviso wealth. You should always consult with your financial, legal, and tax advisoRSPefore making changes. This podcast is provided as a general source of information and should not be considered personal investment advice or solicitation to buy or sell any securities. The views expressed are those of the individual and are not necessarily those of Aviso Financial Inc. Mutual funds and other securities offered through Aviso wealth, a division of Aviso Financial, Inc.