The System

The First Step Cash Management System™ is a simple and effective way to manage expenditures, reduce debt, increase savings, and fund important life goals. With First Step, income flows into three “buckets.” Each bucket holds money that has a specific use or purpose. While each bucket is different, all three buckets are interrelated.

Once this cash flow system is set-up and tweaked based on individual priorities and circumstances, the system goes into autopilot and detailed tracking of expenditures is not required. The result is a simple decision framework that brings clarity and purpose to personal finances.

The blue Static Bucket™ holds funds to pay for financial commitments made in the past. These are predictable and reoccurring expenses such as mortgage payments, rent, utilities, insurance premiums, and loan payments. Ongoing services, like housecleaning and yard care, are also included in the Static Bucket as well as membership fees and subscriptions services. In addition, money in this bucket is allocated to pay down credit card balances. Typically, individuals and families receive monthly bills for Static expenses, but this bucket also includes funds for quarterly and annual payments plans.

The yellow Control Bucket™ holds money that will be spent in the next seven days on expenses such as gas, groceries, eating out, entertainment, and recreation. Control Bucket expenses tend to be less predictable than Static Bucket expenses and also harder to monitor. This is this category of spending that often leaves people wondering, “Where did my money go?” However, setting up a Control Bucket will create an effortless framework for understanding and managing these variable and hard to track expenses.

The orange Dynamic Bucket™ stores money that will be spent in the future. Every month, a set amount will be deposited into various savings accounts representing meaningful goals and linked to future needs and wants. Funds in Dynamic Bucket accounts are reserved for unexpected financial challenges (e.g. emergency surgery for a pet) as well as important short-term goals (e.g., gifts and holidays), intermediate-term goals (e.g., professional growth/personal enrichment), and long-term goals (e.g. education funding). Financial resources reserved for giving and sharing will also be directed to a Dynamic Bucket account designated for that purpose.