Conquering Cash Flow Management

September 11th, 2014

My wife and I have enjoyed some success in learning how to manage our cash flows. The key to our process was downloading all of our bank transactions into Quicken. In client situations where managing their cash flow was an issue, I’ve encouraged them to use the same process. After months of effort, I realized that our process was too bulky and time consuming to be of any use to my clients.

I was expressing my frustrations to a colleague. He said “It sounds to me that you are trying to do what Money Coaches Canada does for their clients.”

I took a look at their web site at where I purchased a copy of their book “Unstuck” written by Karin Mizgala and Sheila Walkington. In their book they have developed a comprehensive philosophy about personal finances and money in general and managing cash flows in particular.

At the heart of their process is what they call the On Track Money Management System. Roughly, here’s how it works.

  • You set up what they call the Main Chequing Account. Monthly fixed costs are paid out of this account. Examples include mortgage payments and condo fees.
  • Then you set up a second chequing account, the Monthly Spending Account. Money is transferred into this account to pay for expenses that occur every month but which can vary month by month. Examples include groceries and restaurants.
  • Then you set up a set of Savings Accounts for fixed annual and lump sum expenses. Money is transferred from the main Chequing Account and used to pay for property taxes, car insurance and home insurance, for example.
  • Finally you set up a set of Savings Accounts for variable annual and lump sum expenses. The transfers to this account are used to pay for home repairs, vehicle repairs and vacations for example.

This is a very brief summary of their process which seemed well thought-out overall but which required a cumbersome number of bank accounts. You may want to download the book and judge for yourself.