Anna Sergunina, founder and president of MainStreet Financial Planning, gives you a simple and effective system to make sure your income and investments are flowing the right direction – toward your upside!
She answers questions like:
- How do I plan my finances if I have irregular income (from commissions, contracts, or side-hustles)?
- What are the best FREE tools to use to implement the Money Flow System?
- How should investments factor into the Money Flow System?
Listen to our podcast on Spotify or Anchor.fm
Watch the video here:
Cindy: Well, welcome everyone and thank you for joining our Upside Avenue Educational Webinars Series. This series is developed with your input. We surveyed our investors and followers to find out what financial and investment topics everyone is interested in learning about, and then we look for subject matter experts all over the country who can speak on these topics. Our hope is to provide you with the knowledge and confidence to manage your finances so you can make better informed investment decisions. We want to make sure you’re living your Upside. Watch your email for information about March is web-webinar and will also share it on Facebook, Twitter and LinkedIn. Today’s webinar is on the exciting topic of how to get your money to flow. Our guest speaker was named a virtual force by Morningstar and recognized by Financial Advisor magazine as a Top Ten Young Advisor to watch in 2017. She’s an advocate for financial education and is contributed to publications like Forbes, Business Insider, USA TODAY, NASDAQ, and The Wall Street Journal. She also teaches her flagship personal finance management course: the money flow system. And engages with followers during her weekly Facebook Live show: Money Date. When she’s not helping her clients and her followers with their financial planning, you can find Anna chasing her 13-month-old son. Please give a warm welcome to our incredibly intelligent friend who admires so much from Main Street financial planning: Anna Sergunina.
Anna: Good morning ladies. Good morning everyone and got it-good afternoon ’cause I know we’re all kind of spread out. I’m sure probably all over the world. Thanks so much for having me over. I’m excited to share with you this interesting concept. I’m sure a lot of you were intrigued by what is this money flow thing she’s talking about. So, hang on and stick around and let’s see what I can teach you today. OK, let’s get this out of the way. You don’t have to read the fine print, but because my industry is highly regulated, I just have to show it to you. It’s all available on our website in case you really wanted to-to get into. But as you probably know, we’re here to provide education and value, so, getting started over the last 15 years as a financial planner and I am in the space of what’s called fee only financial planning. So, I really focus on working with clients on creating what we call a money road map and it’s like it’s like if you remember in the old days we used to have before we had our fancy phones. We would print out directions for example from MapQuest and you have like step-by-step instructions. So, that’s just an idea of how we develop money Road Maps for clients or financial plans and really focus on that as opposed to selling products and managing assets. And, so, a lot of what we also do is education and this is why you guys wanted me to contribute, but what I what I’ve seen and what I worked at-the type of clients I’ve worked with over the last 15 years come from all kinds of backgrounds, all kinds of income levels, asset levels, liability levels, right? So, I’ve seen it all and our practices spread out both East Coast and West Coast so that different parts of the country and so forth. But what I also have seen is the trends in is that most successful clients have a really good handle on where their money is at and how it’s being tracked and-and they have systems in place. But you know success is very interesting word and I don’t really define success right in the amount of wealth you have all that you could, you know, you can certainly start kind of measuring that. Not amount of income or you know you have a lot of data, have a little dead or new debt, but rather the ability for you to reach your financial goals. And, this is the big one, because most of us don’t really have clearly defined financial goals.
Now where you have to, we’ll have to do another presentation on just this topic alone. But in my presentation today, what I want to share with you is how you can actually create a system that’s going to allow you to put all of these. For some clients. It seems like maintain pieces right of budgeting, bill pay, income, expenses and really create a system that allows that flow that I’m talking about. So, as you tuning in. How does this sound? I hope you intrigued and it is really my believe that because I’ve seen this work personally right, I’ve done this myself for many years and I’ve seen clients implement this. If you have the right system in the right tools, which I’m going to share with you, you really can create a stress-free environment because a lot of stress and you probably know can be caused by, you know, uncertainty as to what’s going on in your financial life, and, so, what is this money flow system I’m talking about? What is this money flow concept? It’s really started with the concept in my mind that I was trying to solve for the struggles I was having, but overtime it became a system and, so, it-it really allows you never have to worry about budgeting. Nobody likes to budget. We know that probably 2/3 of population don’t have a budget or if they have one, they never really stick to it. It helps you really getting control of your debt or help you pay it off. If you have some right and create a specific plan or stop accumulating it because that’s another reason why stress is causing us to worry about our finances. It allows you to pinpoint where you have understanding about your income and your expenses.
Never have to miss any bills and then finally really have an idea where all of-all of your monies is at. And the reason I want to focus on those pieces today is because in the world we live now where we make money in all kinds of ways, our income comes in in different formats. It could be a nine to five job. It could be a side hustle that we have. It could be our investments which I’m which I’m assuming from any of you on this webinar today, is the case. So, however, you income comes in, it may not have that regularity that you want, but let’s face it. Every month we have to face a certain amount of bills that we pay and, so, we have to be responsible with that. So, the big question is how do you manage an even cash flow in this in the world like this and really have a system that stress-free, so that was the goal that that I wanted to achieve or struggles I, personally, had because my husband and I both on our own businesses and for those who may be business owners, you know, it’s not predicted every month that you gonna have a paycheck, especially if you have to make sure that your employees get paid first. So, this is this is kind of where it all coming from. And, so, what I want to start with is this, and what should you kind of start, not only focusing – oh my gosh, she’s going to tell us these steps of how this money you know process can help us put it all together, but it’s really not just that I will give you all the steps you’re going to have it, but I want you to start developing in mind and you mindset and I’m trying to share a lot of you. Have heard of this concept which is cash is King right? And it’s great right? If we all had a ton of cash? Then all of our problems will be solved. But when you start looking into the reality of how our lives are structured, it’s not necessarily that we have cash sitting aside, right? It’s more-it’s more of we have a cash flow, right?
That’s coming in every month, every quarter, every so often, right? Whatever that frequency is. So, I want to propose a new way of thinking, which is cash flow is the Queen now when I’m going to get into who has more power here? But because we’re focusing on the flow today and the cash flow is the component of that, I wanted just to kind of start introducing this concept and what you should be asking yourself as I you know, keep presenting my ideas to you is how can I get my own cash flow in the right directions, right? And not just income but also expenses in the whole system together? Because it’s really is a system. Now talking about systems, the first critical step right in achieving that balance is actually creating a system. Because it’s crucial, you know, in implementing anything and it could be something very simple, or it could be something you know complex as you actually grow with it. But why is it crucial and why is it important? It really helps to solve a few common issues that I see is an advisor. My client space and I’ve come through these phases as well. It helps to solve that question about uneven cash flow, right? It helps us create a mechanism right for tracking. It helps us create a sanity and a busy world, right? Because let’s face it, there’s very few people out there who like literally check in with their finances on a daily basis. I-I don’t, I really probably spend most of my time looking at other people’s finances versus my own. A lot of us don’t know how to. We never take any training courses right to begin with, not in high school, not in college. I didn’t, and I know a lot of people really don’t until it becomes an issue. And then I mentioned stress, right? We-we are stressed out from, you know, from various angles and finances cause more of that. So that’s where system is critical because it’s going to help you eliminate all of those issues 1-by-1, right, it doesn’t happen overnight. So, and I’m sure you understand that now, the second important point here is that to make sure we have the right tools in place and I’ll show you all the tools that you need to gather right in order for the system to come together.
So, let’s kind of start from from the beginning. Now, as I understand, you guys are going to get the slides after the presentation, so, you can take notes. You can take screenshots now, but you’re going to get the actual slides, which will have all of this charts and diagram. But if I had to give you a snapshot of what are we talking today, this is it. This is your money flow system as I see it now. I’m going to go through each of the sections and walk you through of how it’s how it’s set up. And how it actually really fits into everything that you’re doing with your finances, how it fits into making sure that you understand the basic things right? Like your fixed expenses in your variable expenses, you understand how to set it up. You can start modifying to any way you want, but then also, how does this really help you get that clarity right? And get the stress out of out of your life? So if — and as you guys have questions throughout the presentation, I’m going to try to pay attention here. To the Q&A box, please let me know and if I don’t see it then I’m happy to answer it. When we’re done OK, just some concepts might be flooring. So, your very first tool is this. This is your outline. So, when you get the slides, I’m going to share a link with you to the actual workbook. This can allow you to, you know, run through with putting your own numbers, calculating your own expenses, and so forth. But right now if you want to just keep following along and just some. Numbers down that would be great as well. So, as we progress into setting up the tools, we have the actual structure that we’re going to set up. So, here is a couple of things that would be really handy in making sure that you guys progress. All right, now, what when I’m talking about a system. It’s not an online app, it’s not an online program. You don’t have to log in anywhere. It’s really just more of organizational structure, and, so, in order for that to come together, you’ve got to compile a couple of these things. Now I’m talking about online logins, online logins because you need to make sure you could access your checking account, your savings accounts, your credit cards, right? All of those things that allow you to gather the information because one of the first steps in setting everything up: you’ve got to come up with your budget numbers. Now I know some of you may cringe to say, well, I don’t really have budget numbers. I don’t really budget. OK, I’m with you on that. I’d rather, you know, for you to gather the information and then you can sort through because you’re going to have to start looking at the system as a whole and spending numbers are quite important and income numbers are quite important, and having all of this come together and then the last, but not least, is schedule and you might be wondering well what a schedule has to do with any of this, right? It’s not a financial tool. It’s really not a financial tool, but it’s really a tool that I highly recommend for you to implement and however you want to do it. But I’m really thinking about making sure if you setting everything up, blocking some time off on your calendar to set it up initially and not just that it’s really figuring out in the future how often you have to come back and check in and make sure your system is running properly and I’ll share with you just-just a little further in our conversation today what I actually do with my own system in my own setup. So, as we got all of those tools together, how do we actually put it all in one place? The first step is to make sure that we’ve got our account set up now, as you saw on the initial chart, it really is a system of making sure that you have clarity as to how your income comes in right. If it’s not on a regular basis, how can you establish that baseline so that you can make sure you pay your monthly obligations? So, for that you need to have your checking account and savings account right, and I recommend to have two checking accounts and one savings account. For those of you who are little bit more advanced, credit card or credit cards, if you use them and hopefully pay them off at the end of the month are also helpful. And then of course, right, because we’re talking about and I hope that you’re even cash flow, right? If it comes in from your investment accounts, how you know how can you make sure that they are feeding into your system so those would be the critical elements for you to set up right away? And, so, here’s-here’s a graphical view of what it looks like to begin with. Now we will figure out at some point with that paycheck looks at the top now. It could be that you really are getting a paycheck right every two weeks every week, biweekly. For example, in my business we get paid once a month. So, that’s the frequency, but I know some-some investments payout dividends on quarterly basis, right? Some, maybe you get distributions every so often, right? Or maybe you don’t even take out your distributions, you just reinvested, but, so, whatever that top line is, however, that flow is-is going to establish that baseline or what your paycheck is. Now we’re going to get further into developing an understanding, right, of what-how much money needs to be split into two different checking accounts? Now I’ll tell you the reasoning behind two checking accounts and when I was really struggling with this it was it was for a simple reason, because if you if you think about this and some of you may already have something similar, ’cause every time I share this with clients they say: oh yeah, I already have a second checking account. I, you know, I pay my mortgage out of it or you know I pay for my property taxes out of it or some you know some irregular bills that don’t come through on the monthly basis, and that’s fine, but what I wanted to see the clarity I wanted to get to gain from having something like this was this: I wanted to make sure that my fixed and variable expenses had been taking care of the most important was for me at the beginning or the fixed expenses, right? And, so, I’m giving you some of the ideas, right?
This is not a complete list, ’cause it’s-it’s a mile long and you’ll have variations there, but most basic things like you know. A roof over my head, you know rent or mortgage, right? Household meetings out of payments insurance. One of the things that I really make a lot of emphasis on-on and you can see here at the bottom of my list are savings in various categories and if we have debts that we working through. Because what I want to make sure personally and professionally from clients is that they have specific targets right as far as some what the savings have to be. How much more do we have to pay towards debt in order for those goals to come through? So those numbers-and that’s what I was mentioning to you earlier. You can work through this in the workbook that will share with you. You can figure out all of those together. And, so, when you add up your totals. That becomes your fixed expense and the reason it’s nice to sit in a separate account is because you know what it is every month. You don’t have to worry about it. It varies, but slightly right, and the one other thing that I also have done and recommend for everyone to is to establish a deadline by which all of these bills can be paid. And if you want to go further you can set them up on auto pay so you see my note here that they can be paid by the 15th of the month, which is true for me. So, really. If you think about it for the second part of the month, on any given month, I don’t really check that fixed expense account. I look at it right? ’cause if you log into your bank online or on your phone when you’re you know in in the app, you can still see it, but it’s not-not much going on there and the second part, which is the variable expense-expense category. And this is really more open for your imagination in terms of what you want to call variable rights, because some argue that groceries or, you know, things like that could be more of the fixed category. Fine if you really stick to a strict no shopping budget and things like that, but whatever that is, it’s-it’s-it’s to your discretion. And, so, when you start to identify what those expenses are an I hope that you guys, if you haven’t yet, there’s a lot of tools online there. Free tools that allow you to track your spending across multiple accounts across your credit cards across your checking account. I’m talking ‘bout mint.com. I’ve been a long-term user. Personal Capital is another great service. They have other options that you can utilize right for investment management and things like that, but at the very basic really could give you a good reality check where you spend all your money. Just if you haven’t set it up, try it out for for a month and you really will start seeing where things are going because that will give you a sense. ’cause I know most people don’t really realize what their actual variable expenses are, right? We are pretty, I don’t know what the fixed our ’cause. We gotta face them every every month and so that’s what becomes now. Kind of the two runways. If you will write one is a fixed kind of side, the other is variable that has fluctuations now. Something else to mention as well and this is really relevant to a lot of you here, right? And I think you know pretty much anyone out there today because the way that we have opportunity to earn income is something what I like to curl. Call a curveball account now for all of you out there, this is really referring to an emergency fund, right? A rainy day fund. But what I want you to think about is OK, so, what happens if my income isn’t consistent, right? Or what happens if there’s an extra expense I didn’t anticipate right? And so that’s what really defines emergency fund is what is what if emergency comes up and I need to come up with additional money now, as you can see, I mean, you can put a lot of different definitions. What goes into the emergency fund, but at the very minimal is can you have enough reserves there for three to six months worth of your fixed and variable expenses. Now what I want you to really get out of this, and I think a lot of you’ve heard of this concept right?
Emergency fund a prudent step in creating, you know, sound financial plan, but you just see these little arrows kind of feeding into each side of either fixed and variable expenses. So, what I’m trying to set up here is to have reserves right, or to have a backup system in case I face a month right where my income hasn’t hit that threshold that I’m needing right to feed the fixed expenses and variable. But because I know what they are right, I can kind of see it ahead of time and say, alright, well, maybe this month I’m short. $1000 in my fixed bucket, right? Or really, I would probably never put my fixed expenses right on my fixed account into that position because I’ve got to make sure those are paid so it’s the variable. Is the one that’s going to be discretionary, and that’s the one that I can, you know, scale back. For example, don’t have to go out to eat this much, whatever right, you-you kind of choose what you have to cut back on, but that’s where you can kind of go to as a reserve and get the funds as you need it. OK, now something else that really worked for my family and if you have significant other with whom you sharing your finances, we really only have access in terms of like, immediately pulling cash out is our variable expense account, and that’s where you have a debit card attached to fix the sense account. It’s just a checking account that we specifically said not to give us a debit card ’cause it’s really not necessary at all. And as you can do online transfers, you know if you really have to, but it’s really serves as a pass through for paying the bills and so debit card helps us. You know if you have to go get the cash out of the ATM and so now when we start to piece all of these sections together now you should start to see how it starts to flow. So, for example, if you had a paycheck right? I’m going to just use round numbers for the sake of example. They had a paycheck that let’s say $5000 a month and 50% of that went into checking account number one, 50% went into your variable expense account and then that allows you to pay for pay for all of the expenses, but you really needed only 4000, right? Then you know you would have discretionary or disposable income, and this is really the goal. If you can get to a point where you make more than you spend right, you probably guys heard about this concept then that gets you onto the path of financial success or helps you actually focus more on-on savings and, you know, doing the discretionary things, but in case where you don’t, let’s say one month you have $4000 income and your overall expense numbers are $5000. This is where you can dip into your curveball or emergency fund account to help you, you know, fulfill that shortfall. Something else that I wanted to mention and some of you might be good with credit cards and really are responsible to pay them off at the end of the month. It took us personally. Awhile is a family to graduate right from just having two checking accounts and not really using credit cards. But we have and so now my husband and I have a joint credit card and so, we charge pretty much everything in this box over here and more. I even pay for daycare with the credit card because they give me great miles, right? Excuse me. So, what I paid off at the end of the month even though daycare is not a variable expense, right? So, I start to kind of mix and match because it’s a fixed bill that has to get paid every month but-but because I have a structure and have a feel for it, I can play those kind of games if you will. Because if you’re working on if there’s debt present right? Whether it’s credit card debt. Student loans or whatever you have, it probably is better to not introduce it into the overall system and try it out without it for the time being. And then if you feel more comfortable that you have control of your own spending, then of course why not? ’cause there’s-there’s benefits of doing that, so, here’s the playbook that I mentioned to you that you can download it free. Doesn’t cost you anything. I go in a lot more details.
You’ll get the workbook. From the charts and so forth that you can actually work through in creating this for yourself. And remember I mentioned schedule right or setting up blocks of time in order for you to-to implement all of this, and I would probably if I have to guess initially, because again, I’ve just done this over the years and it’s-it’s also kind of more trial and error, but I probably would give it a few hours initially to really set it up and work through a lot of people get stuck into-into figuring out there kind of a fixed and variable side of things, but that’s why I think having specific tools that allow you to track your expenses. More passively for awhile, will really shine light onto that. Also, for those of you who do use credit cards, you get year-end summaries of all of your spending, so take a look at those were really early into the calendar year, so, you probably have your 2019 summaries somewhere in your – however you get them by Mail or email, so, take a look at that. That really should give you a snapshot, not complete, but somewhat of a snapshot of where your spending it so check it out. It’s free to use and let me know if you have questions. I love this concept. I it’s really, you know it is. I would call kind of basic first building blocks of a financial plan, but it’s a really solid foundation if you have it and if you have ideas how to make it even better– I would love to hear your feedback. So here are my kind of a best practices, if you will, that really help and I mentioned this to you at the beginning that the idea is. For you to have a system, and when you have a system or process, it really should be all about managing, right? ’cause I don’t want to create and I-I didn’t want to have something that I have to constantly be paying attention to, right? Of course you have to overtime so a couple of things that I do on a regular basis, which weekly what I call: Money Dates. Now, had to come up with a cute kind of a term in order to get my husband interested in talking about this stuff ’cause he said, well, you sort of deal with-with this you know spending and expenses and stuff like that. I’ll worry about everything else and I was like, OK, well, let’s just have a quick money dates, right? ’cause money dates seem to be exciting kind of a topic, but it really was a sit down for both of us in the short conversation once a week is to see, alright, so, how are we doing with our system right? And because really he wasn’t. He still isn’t managing the fixed side of things, and that’s pretty much on autopilot. All I do is win because I mentioned to you and I really like it. Personally, I use mint, mint.com. It’s you can have an app on your phone or log in online. I just log in and gives me kind of a snapshot of what the balances are across all of the accounts, right? And I really have three checking, savings and checking in one savings.
Of course, all of the investment accounts, but also credit cards, right or credit card, so, it kind of gives me that snapshot. There are other tools, but this is what works. This is all you do is just take a look and see how this is. Stack up with where you supposed to be. Now, the reason for frequent conversations versus monthly. Is because if something is off, if you’re deviating from the plan right or situation came up, you had an unusual expense, right? Or if you seen that you aren’t going to get the income you were anticipating, you have time right to make corrections. ’cause if you only obtain to this once a month, which I think most of us do, ’cause you’ve got to pay your bills somehow, right? Whether they set up on auto pay or you write checks, it may be too late for you to figure this out, so, I would recommend Weekly Check-ins. It takes virtually no-no time, and on the monthly basis it would be more of looking through everything to make sure you got all the expenses that come through. I also checked the credit card bills to see how things you know are there unusual transactions and-and things like that just to check off everything and that normally takes me like an hour if-if that and then that’s it and so really if you committing to something on a regular basis, it’s not all the time, but as I mentioned about the schedule, it really just setting up initially. And then you know, working it into your busy life into your schedule and see how it fits with what you’ve got going on. And of course, because we’re you know, we’re all thinking about all right? So, if I have the uneven cash flow or you know it, it changes from time to time. I what I also found really so it wasn’t so much about the system when I started to think about it. It was really so much about establishing what’s that baseline, so, if anything, if you do this exercise right, just sit down, look at the print-out that chart that I had for you on one of the slides. Just figure out what your baseline is because it gives you so much clarity and understanding. You say, OK, well, I’ve gotta have whatever my number is $5000, six thousand dollars, $10,000 a month, and that kind of has, you know, have that number in the back of your head, and, so, it’s just. It’s just so much more powerful when you know. And that was the really cool idea of-of how it all came together. So, I am at the end of my presentation. Would love to see if you guys had any questions.
Cindy: I’m going to jump in real quick, Anna, and thank you so much for the presentation. Just as a reminder, if you have a question, please use the Q&A feature at the bottom of your screen to ask Anna your questions, and I’m going to start off with one you talked about how to integrate technology into the system, and it’s a quick system to set up at one point when I’m using the system, do just investing come in? Where? Where would I know that I’m ready to start investing? Even if it’s just like with Upside Avenue $2000 investment? Investment.
Anna: Yeah, it’s a good question. I think if I let me go back to I want to have this chart on the screen, I think it’s going to help answer that question now. I mentioned earlier that once you, if you really sit down and work through figuring out what your fixed and variable expenses are, it should really shine light onto what – if you know your income, right? What your discretionary income is. So, once you, if you haven’t really set goals for what the savings targets should be, right? And I have both here for retirement or for investments like. You know, if you wanna invest $2000 into Upside fund rate or you know if you really want to add additional money to your debt payment, so, kind of wait all knows 1st and see what this discretionary income is and then it’s going to give you an idea. OK, well, maybe you have $500 when everything is said and done. ’cause the idea is not to this is not a budgeting system. That’s why I said it’s really more about where’s that freedom for you to do the things you want and so its investments is the goal, I know it should be for a lot of you because that’s how you. Create wealth right? And you create passive income. That’s where I would start looking at is. Where do I find that discretionary monies? And this is also like a check in system with yourself to say all right? Well, what does have to be scaled back now? That’s a normal way of looking at things. I’d rather you focus on how can you create more income. But if you don’t have the base under control, it’s hard to write. Hard to see it.
Cindy: Thank you so much for that. Does anybody else have a question? Please feel free to click on the Q&A button at the bottom and will read your question out and Anna would be more than happy to answer it. OK, well Anna would you mind? We don’t have any questions now, but I’m sure you will have questions in the future. So, if you’ll show your — Yep there we go. So, if you want to reach out to-to Anna, her contact information is listed here. She teaches her personal finance, management course: Money Flow System, and you can find information about that on our website. Please do download that tool she offer and then you can also catch her on our weekly Facebook Live show money date. So, thank you so much for the information you shared with us today. I know I’m going to go home and-and put this system to work for myself. I may be emailing you.
Anna: Yes, totally for sure, and if like I said, if anybody has questions outside of this presentation. If you’re working through it, just email me, let me know. I’d love to see how it’s coming together for you. And if I think part of this webinar we decided to offer – if you guys want to talk about other kinds of topics besides cash flow and expenses, I’m happy to do that. And I think there’s a -yeah, there’s a code right here. You can email me and let me know that you are part of the webinar and I’m happy to set up a check with you and see what – with other questions I can answer for you.
Cindy: Yep, that’s a 30-minute free consultation. You can see the code right there on your screen, Upside. Everyone lookout for registration information about marches webinar in your email as well and will share to Facebook and Twitter and LinkedIn. Thank you so much for joining us today. We want to see where your Upside is going to take you with Upside Avenue. We provide access to professionally managed diversified portfolio income producing multi-family real estate for as little as $2000. You can visit our website upsiteavenue.com or send us an email or call us with any questions you have as well. Have a great day. Thank you.
Anna: Thanks so much. Bye everybody.
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