I received your book, Cash, Cars, and College for Christmas this year. I just finished reading it. I have also heard you speak to the youth a couple of different times regarding the flow of money and the 40/60 principle. I have a few questions for you in regard to these principles. I have been practicing the 40/60 principle off and on for the last few years. Right now, I am trying to save for college this coming fall. I do not have a need for a lot of spending money right now. I am more concerned about saving money for school, a car, laptop computer, etc. If I have $20 just sitting in my wallet, can I put some of it into my short-term savings account, or would that break the flow of money? I would like to keep a few dollars in my wallet for an occasional movie, dinner with friends, or emergency. But I would also like to save as much money as possible for this coming fall.

Also, I am one of six girls in my family. I have considered setting up a "wedding fund" to help pay for some of the costs. I am not planning on getting married for quite a few years yet, but I would still like to be prepared for when that time comes. So...would I take a little of my 40% and put it into that fund? I know that I could put it into my short-term savings account, but I could not guarantee that it would stay there. (Since for the next little while, there are going to be a lot of things I will need). I hope that makes sense. :)

Thank you for your help!

                      Beth, California

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Dear Beth,

Yes, you may put extra money in your short-term savings account as long as all the other allocations are up to the levels of 40/60 split. This doesn't break the flow of money because you have allocated the "minimum" amount of dollars to the various arms of money and all you are doing now is putting money from the "living" arm into the "savings" arm. To "live" on less so that you can "save" more is just fine and never breaks the flow of money. You break the flow of money if you try to go the other way with it (ie: pulling money from savings to "live" better or pay for luxury items).

Yes, the wedding fund would need to come out of your 40% or just trust in the Universe to present you with enough money-making opportunities so you can increase your short-term savings. Start working 2 to 3 jobs now to get your cash flow increased and really ramp up your savings rate. When I was 15 I worked at cleaning houses, bagging groceries and mucking out horse stalls at a local ranch to earn money for college. All this while attending school and being a chess club member and on the school's debate team. When you have a vision for what you want out of life, it is amazing how your brain will come up with all kinds of ideas on how to make money and get it moving toward you.

Good luck with the job search and the savings rate,
Janine