There is a term I use in a lot of the materials I have written for the 9 Moves program that I wanted to highlight in a very short post. The term is flex cash.
Simply put, flex cash is the total amount of money you have left after you’ve subtracted your expenses from your income. Let’s look at a quick example:
- Monthly Income = $3,100
- Fixed Expenses = $1,100
- Variable Expenses = $600
- Debt Payments = $500
- Insurance Payments = $200
Notice we didn’t add “savings”, “investing”, or “extra debt payments”. Those, among other categories, are budget line items that your flex cash will go to.
In the example above, you would have $800 in flex cash to put towards your next Moves. Let’s say that you’re on Move #3 (Save 5%) and you need $2,400 to hit that goal. You would use your flex cash for three months to fund that goal (3 x $800 = $2,400). Once the goal is complete, you’d press forward to Move #4 and use the flex cash to fund that goal.
This is money that is flexible, meaning you can put it where you need it. It’s not earmarked for anything yet, but it needs to be. That is where the 9 Moves program comes into play and you learn about where to put this flex cash.
The goal of anyone on a budget is to make sure that you have as much flex cash as possible so you can fund your goals as fast as possible. To do this, you may consider cutting cable, eating out less, having less pocket money for the month, or lower your cell phone bill. It may not seem like much, but a lot of little stuff added together can give you an extra couple of hundred bucks every month to add to the “flex cash” pool.
Lastly, this doesn’t change your budget. I am just giving a name to the dollars left over after you’ve done your monthly budget. The flex cash always gets assigned to something, which is where the 9 Moves program comes in handy.