Take Control: The 40-40-10-10 Cashflow System
Table of Contents
Introduction: Why Cashflow Matters
The 40-40-10-10 System Explained
Step-by-Step: Setting Up Your Automated Cashflow
Real-Life Example: A Geelong Family’s Budget
Tools and Tips for Success
Next Steps: From Cashflow to Financial Freedom
About Andrew
1. Introduction: Why Cashflow Matters
Life in Geelong is a balance—raising kids near Waurn Ponds, enjoying a coffee at Eastern Beach, and planning a secure retirement on the Bellarine. But without a clear plan, money slips away, leaving you stressed about bills today and your family’s future tomorrow. As your local financial planner, I’ve created the 40-40-10-10 Cashflow System to simplify your finances, automate your budget, and build wealth for you and your children—all with minimal effort.
Imagine knowing every dollar is working for you: bills paid, life enjoyed, and savings growing for your retirement and your kids’ dreams—whether it’s their first home or Uni fees. This eBook shows you how, step by step. Ready to take control?
2. The 40-40-10-10 System Explained
This system splits your after-tax income into four easy buckets:
40% Fixed Expenses: The must-haves—mortgage, rent, gas, electricity, insurance. These keep the lights on and the roof over your head.
40% Needs: Everyday costs you can tweak—groceries, clothes, petrol, kids’ school fees. You’ve got some control here.
10% Spending: Fun money for anything you want—dinner at The Wharf Shed, a weekend at Torquay, or a treat for the family.
10% Savings/Debt: Your future fund—extra super for retirement, savings for your kids’ first car, or paying down debt.
It’s balanced and flexible, working whether you earn $2,000 or $10,000 a fortnight. Why 40-40-10-10? It covers essentials, gives you freedom, and builds security—perfect for Geelong families looking ahead.
3. Step-by-Step: Setting Up Your Automated Cashflow
You can set this up in one afternoon—then let it run itself. Here’s how:
Calculate Your Income: Check your after-tax pay (weekly, fortnightly, or monthly). Add up what lands in your account. Use ATO’s tax calculator (ato.gov.au) if unsure. Example: $4,800 fortnightly for a couple.
Split the Buckets: Multiply your income by 40%, 40%, 10%, 10%. For $4,800: $1,920 fixed, $1,920 needs, $480 spending, $480 savings/debt.
Open Bank Accounts: Use one main account (income lands here) and four sub-accounts: “Fixed,” “Needs,” “Spending,” “Savings/Debt.” Most banks now offer free sub-accounts.
Automate Transfers: Set up transfers from your main account to each bucket on payday. For $4,800: $1,920 to Fixed, $1,920 to Needs, $480 to Spending, $480 to Savings/Debt.
Link Payments: Direct debit fixed costs (mortgage, bills) from Fixed. Use debit cards for Needs and Spending. Auto-send Savings/Debt to super or a kids’ savings account.
Review Monthly: Spend 10 minutes tweaking if costs shift—e.g., groceries rise, pull $20 from Spending.
Automation means no more guessing—your money flows where it’s needed, every time.
4. Real-Life Example: A Geelong Family’s Budget
Meet John and Lisa, a couple in their 50s living near Highton. John earns $2,500 after tax fortnightly, and Lisa brings in $2,300—together, $4,800 every two weeks. They’ve got a teen at home and want to retire comfortably while helping their son’s future. Here’s their 40-40-10-10 plan:
40% Fixed Expenses: $1,920
Mortgage: $1,300 (on a $650,000 home)
Electricity/Gas: $250
Car Insurance: $120 (two cars)
Internet: $100
Council Rates: $150
Total: $1,920
40% Needs: $1,920
Groceries: $700 (Coles Newtown)
Petrol: $200 (commutes to CBD)
Clothes: $150
Phone Bills: $120 (two mobiles)
Household: $250
Kids’ Expenses: $500 (school, sports)
Total: $1,920
10% Spending: $480
Dining Out: $150 (Restaurant)
Coffee: $60 (Pakington St)
Entertainment: $100 (movies)
Hobbies: $170 (golf, yoga)
Total: $480
10% Savings/Debt: $480
Super Contribution: $200 (John’s super)
Kids’ Savings: $280 (for their son’s first car or Uni)
Total: $480
John and Lisa set this up online in an hour. Bills are paid, they enjoy Geelong life, and $480 fortnightly grows their future—$5,200 a year to super, $7,280 for their son. It’s hands-off and family focused.
5. Tools and Tips for Success
Make it stick with these:
Tools:
Banking apps (CommBank, Up) for sub-accounts.
Budget trackers like Pocketbook (free) or your Bank app
Moneysmart.gov.au calculators for super or savings goals.
Tips:
Test it one pay cycle—adjust if kids’ costs spike.
Shop smart—Aldi over Coles if Needs creep up.
Prioritize kids’ savings if debt’s low—$280 fortnightly grows to $15,000 in 5 years at 2.5%.
Scale it—more income? Boost Savings/Debt for your grandkids’ future.
6. Next Steps: From Cashflow to Financial Freedom
This system is your foundation. That 10% Savings/Debt can become $50,000 for retirement or your kids’ first home in a decade. Want more? I can help:
Consolidate super to save $2,000/year in fees.
Use super to draw super tax-free while working.
Plan a $20,000/year retirement income + kids’ legacy.
Email me at andrew@rpsadvisorygroup.com.au or call 0418179218 for a free 15-minute cashflow chat. Let’s turn your money into security—for you and your family.
7. About Andrew
Andrew is a Geelong-based financial planner with 15+ years helping locals take control of their finances. From risk protection to retirement planning, I’m here to simplify your money and secure your family’s future
Comments