It’s the same every two weeks. You get a paycheck and have big plans to contribute to your 401(k), throw some money at the “vacation fund” you’ve been working on, and maybe up your monthly student debt payments by a few extra bucks. But how often does this system actually work?

If you’re anything like most of your friends, your good intentions are probably never realized, even if you’ve already read about our 10/20/30/40 budget structure. That’s because most of us aren’t great at managing cash flow. Part of this can be traced back to what we’ve all been taught about how to handle money and what we call the “left-over” mentality. If there is anything left-over at the end of the month, we’ll (insert financial goal here). The typical cash flow cycle that people experience looks like this:Look about right? That’s because this is the “normal” way we’ve always been told to set up our finances. Most people have a checking account and everything goes in and out of that single account where they manage their money. No wonder it’s tough to stay on track with your budget – you’re immediately given access to all your income right out of the gate and have to consciously make the decision each pay day as to how you’ll divvy it up. That leaves a ton of room for error. What if you have to unexpectedly go to the doctor with strep throat? Or you forget that Christmas or holiday gifts are going to cost a small fortune? It’s all too tempting to tap into the 20% of your income that’s going towards savings or the 30% of your income that’s going towards debt repayment.

At NewLeaf Financial Guidance, we like to simplify this process with a system we call the Cash Flow Machine. There are a few keys to the Cash Flow Machine that make it work.First, set an intentional budget. We recommend using our 10/20/30/40 budget as a rough guideline to get you started.

Second, separate your income from your spending. Once we have a budgeting game plan in place, it’s time to set up the big key to your Cash Flow Machine: a hub account. This is where we buck the traditional budgeting trend of having a catch-all checking account. A hub account changes the game when it comes to managing your cash flow. Why? Because it takes the guesswork out of it. Hub accounts are set up to be entirely automated.

Third, recreate a “paycheck.” As income comes into the hub account, we turn around and recreate a “paycheck” for you to use. This recreated “paycheck” is sent to your checking account to provide for living expenses and fun money, and it’s always the same amount. We then automate payments from your hub account to savings, debt payments, or any other financial goals you have. This helps you stay true to your original intentions without sacrificing an enjoyable life while you build to your goals. Here’s how your cash flow cycle with a hub account looks:


The money in your checking account is used to spend intentionally on what you need while still enjoying your life. You also don’t have to worry about neglecting to pay down debt or bump up your savings with bigger, more regular contributions because those have already been budgeted for and paid out from your hub account.

The hub account works well for people with irregular or “bonus” income, as well, such as business owners or medical professionals. If your income is higher in some months, whether it’s just peak season with your business or you’ve received a production bonus, the hub account structure helps to regulate that income.

Check it out:


This leads us into how the hub account makes your spending life easier – through the recreation of a paycheck. Right now, you’re probably use to seeing all the money from your paycheck deposited into one local checking account. The hub account allows us to maintain this “paycheck” structure, it’s just a recreated version of what you were receiving before. Because the hub account will automate debt payments, savings contributions, charitable giving, and any other payments you may want automated, it can also automate a “paycheck” to your primary spending account. This paycheck will be less than you’re used to seeing, but it will also be the real amount that you’re budgeted to spend intentionally. Again, this reduces any chance for budgeting errors on your part, and takes away the need to impulsively spend the money you had allocated towards giving, debt payments, or savings.

The hub account is an underused budgeting tool that makes achieving your goals possible. Plus, it sets you up for future success without sacrificing the ability to enjoy your life and hobbies right now.

If you’d like help setting up a hub account or organizing your budget and personal finances, feel free to contact me today. I’d love to help you get organized and get rolling on the path to having your financial situation under control and thriving.

To see the hub account concept demonstrated in a more visual way, check out our video: