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Household & cash flow · plain-English guide

Give every extra dollar a job

Keep a cash cushion, fund an account, pay down debt, and invest what remains—in the order you choose.

2 min readWorked example included
How to read itCash flow
Core relationshipcash reaching the next step = cash reaching this step − money used or reserved here

Conceptual illustration. The annual engine resolves the connected taxes and cash flows described below.

Start here

The basics

Cash-flow priorities tell the plan what to do with money available after the year’s bills. Open Cash flow in the plan settings and arrange the steps from first to last. Each step receives what the steps above it leave behind.

This is separate from the selling order, which decides where money comes from when a year needs more cash.

Illustrative numbers

Split the money that is actually left

Cash above an already-funded reserve$20,000

First account: 25% of remaining extra cash$5,000

Second account: 50% of what remains$7,500

Final sweep to investments$7,500

The second percentage applies to $15,000, not the original $20,000. Put the reserve before these steps if it should have first claim on the cash.

Calculation transparency

How it works in MoneyWhatIf

  1. 01

    A reserve can be a dollar amount or months of outgoings. It protects cash reaching that step; a funding step above it can use money before the reserve sees it.

  2. 02

    An account-funding step can request an annual amount, a share of remaining extra cash, an amount linked to income, or property-sale proceeds. A final sweep can use one eligible account or the contribution-based split.

  3. 03

    Extra debt payments can sit ahead of investing. A mandatory funding or debt-payment request may require asset sales; a percentage of surplus cannot manufacture cash in a short year.

  4. 04

    Date windows let priorities start and stop. Money left unallocated stays in cash and earns the unallocated-cash return selected here.

Keep in mind

Model limits

A priority does not bypass an account’s eligibility rules. Check its destination after removing or disabling an account.

A cash reserve is not a promise that spending remains funded. Review shortfall years and the selling order too.

This explanation documents the planning model. It is educational, not individualized tax, legal, Medicare, or investment advice.

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Related financial terms

Plain-English definitions, with 2026 figures and worked examples, from the financial terms glossary.

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