Note:

• The above Cashflow Diagram for Financial Independence shows how money flows when using my budgeting system called STUFF. S is for Shelter, T is for Transportation, U for Utilities, F for Food & Miscellaneous and F is for Family.

• All Income from your job or jobs if you are a couple flow into your regular checking account, which I call your “Put & Take Account” because you put money in and you take it out. This account is to hold the money needed to pay STU (Shelter, Transportation and Food & Family) expenses, which should be set up as fixed monthly expenses.

• Income from work bonus, commissions, tax returns or any found money should be deposited or transferred into a separate account called “Future Expense” account. That money pays expenses that are quarterly, semi-annual, or annual expenses, and holds money for future wants and needs and for emergencies.

• Commission Account or Accounts for a couple are for out of pocket expenses, which are the expenses that tend to be budget busters if they are not monitored and controlled carefully. The amounts given need to be fair, but not equal, as one person may have larger needs or expenses than the other. Separate accounts can be set-up for these commission accounts, with debit cards or cash can be disbursed from the main checking account on a weekly basis. It is best to fund these accounts on a Sunday evening, so each begin with their full commission as the week begins. If commissions are paid at the end of a week, the money will likely be spent over the weekend and nothing will be left for during the week. Whoever buys the family groceries of pays for children activities would receive the money budgeted for those activities.

• Debt Payoff Plan – As your budget is created, a fixed amount should be budgeted each payday to accelerate the pay-off of all debts. Pay each creditor the minimum monthly payment, while applying your debt payoff accelerator payment toward the smallest debt, until it is retired. Then add the previous minimum payment for the paid-off debt to your accelerator and attack the second smallest debt. Repeat the process until all debts are paid-off. Refer to Chapters nine and ten in book Planning for And Achieving Financial Independence for more details.

• The key to success during your working years and during your retirement years is responsibly managing your cash flow.