First Step Cash Management System™

Decision Making Framework

The First Step Cash Management System™ is a web-based program that allows users to create a personalized framework for making values-based financial decisions.  It is a simple and effective way to manage expenditures, reduce debt, increase savings,  plan for life transitions, and fund important life goals. 

Conversations about Life & Money

They say that necessity is the mother of invention, and nothing could be more true in reference to the First Step Cash Management System™. In the beginning, this program was used as a personal finance management tool by its creator, Marty Kurtz, CFP®.  However, experience has shown that much of its value is experienced when First Step is also used as a tool for good communication.

Money decisions are indeed emotional decisions.  When individuals start to communicate about those decisions with their friends, family members, and financial advisors, they need a framework that allows everyone to understand the definitions and boundaries of the words that are being used. 

We believe First Step Cash Management can provide a language that everyone can adopt and use to have positive, proactive, and authentic conversations about life and money.

Integrating MQ & First Step

Combining the MQ 5-E Financial Life Planning Process with the First Step Cash Management System will result in a financial plan that reflects your clients’ values and priorities, motivates action, and inspires commitment.
 
The Money Quotient values clarification and goal setting process will act as a bridge connecting life conversations with financial conversations.  New insights gained while completing the MQ tools will foster client engagement and set the stage for a meaningful and productive cash flow dialogue.
 
By adding First Step, your clients will gain a whole new perspective on their current situations and the way money flows in and out of their lives.  With this insight, they can begin to make financial decisions in a more intentional way, and create a framework for making spending, saving, and giving choices that will keep them on the path to achieving their life goals. 

How First Step Works 

The First Step Cash Management System™ is a simple and empowering method for managing expenses, reducing debt, increasing savings, and funding important life goals.  In contrast to traditional budgeting, this online tool provides your clients with a simple framework for understanding, organizing, and maximizing their financial resources. 
 
With First Step, income flows into three accounts referred to as “buckets.”  Each bucket holds money that has a specific use or purpose. While each bucket is different, all three buckets are interrelated.  Once this cash flow system is set-up and tweaked based on individual preferences, priorities and circumstances, the system goes into autopilot and detailed tracking of expenditures is not required.  The result is a simple decision framework that brings clarity and purpose to your clients’ personal finances.
 
In addition, First Step provides you and your clients the ability to develop multiple cash flow plans and to run comparison reports.  This feature allows detailed “what if” scenario planning and creates a powerful decision making framework.  Whether your clients are anticipating retirement, preparing for the birth of a new baby, planning a dream vacation, or changing careers, First Step is the perfect tool for visualizing and preparing for a special event or import
ant life transition.
 
"Only when you learn to spend money in concert with your underlying values—the things that you most deeply care about—will it become a tool for creating a more fulfilling life."
Karen Ramsey, Think Again:
New Money Choices, Old Money Myths

First Step “Buckets”

The Static Bucket™ holds funds to pay for financial decisions made in the past and reflects ongoing financial financial commitments.  These are predictable and reoccurring expenses such as mortgage payments, rent, utilities, insurance premiums, and loan payments.  Ongoing services, like housecleaning and yard care, are also included in the Static Bucket as well as membership fees and subscriptions.  In addition, money in this bucket is allocated to pay down credit card balances. Typically, individuals and families receive monthly bills for Static expenses, but this bucket also includes funds for quarterly and annual payments plans.
 
The Control Bucket™ holds money that will be spent in the next seven days on expenses such as gas, groceries, eating out, entertainment, and recreation. Control Bucket expenses tend to be less predictable than Static Bucket expenses and also harder to monitor.  This is this category of spending that often leaves people wondering, “Where did my money go?”  However, setting up a Control Bucket will create an effortless framework for understanding and managing these variable and hard to track expenses.
 
The Dynamic Bucket™ stores money that will be spent in the future.  Every month, a set amount will be deposited into various savings accounts representing meaningful goals and linked to future needs and wants. Funds in Dynamic Bucket accounts are reserved for unexpected financial challenges (e.g. emergency surgery for a pet) as well as important short-term goals (e.g., gifts and holidays), intermediate-term goals (e.g., professional growth/personal enrichment), and long-term goals (e.g. education funding).  Financial resources reserved for giving and sharing will also be directed to a Dynamic Bucket account designated for that purpose.

TPC + MQ Alliance

The Planning Center™

First Step Cash Management™ was originally created by Marty Kurtz, CFP®.  Like many financial planners, Marty started his career in the insurance and brokerage industry.  In those days, Marty was 100% commission-based and experienced large swings in his income.  As a result, Marty designed First Step as a way to manage his own cash flow and to financially support his young family. 
 
In 1998, Marty founded his own independent, fee-only financial planning firm, The Planning Center (TPC).  Over the years, Marty shared his simple First Step Cash Management System with clients who were having trouble reaching their financial goals.  To this day, some 25 plus years later, many of these same clients still use First Step as a tool for making financial decisions and maintaining their sense of financial well-being. 
 
As Marty's client base grew, he eventually hired Eric Kies, CFP® and Matt Sivertsen, CFP®.  As young professionals, Matt and Eric first applied First Step to their own personal finances and were astonished at the sense of control, clarity, and vision that resulted within a few short months.  Inspired by their own experiences, the team at The Planning Center began to develop a web-based version of this unique and powerful financial planning tool. 

Money Quotient®

Money Quotient (MQ) is led by Carol Anderson and Amy Mullen, a mother-daughter team, who are dedicated to researching concepts, models, and programs that will enhance the success and satisfaction clients experience while engaged in the financial planning process. 
 
In the early years, Carol and Amy grew confident in the effectiveness of the values clarification and goal setting processes they had developed, but also felt something was missing.  The MQ Financial Life Planning tools helped individuals define "what" they wanted in life and "why" it was important to them, but did not answer the question of “how” to align their finances in support of their goals.  Thus began a multi-year review of various budgeting and money management programs in pursuit of a simple and effective methodology that would complement the MQ 5-E Financial Life Planning process they had developed. 
 
In April of 2007, Marty Kurtz invited Carol and Amy to The Planning Center (TPC) to conduct an MQ training for his team.  During a break, he suggested that they take a look at some of the other tools TPC planners used in their client meetings.  When Marty shared his First Step Cash Management planning tool, Carol and Amy immediately recognized that it was exactly what they had been looking for!  
 
Soon, the two organizations began discussing how they could make First Step available to other financial planners and a partnership developed.  MQ now distributes the First Step online planning tool to financial planners via Partnership arrangements and also provides training and support. 

Partner Agreement Information

Fees

One-time set-up fee: $400.00

Monthly subscription fee: $50.00

Benefits

Administrator Account

100 Client Sub-Accounts 

      Additional sub-accounts can be acquired in sets of 25 at $10 per month

Electronic User’s Manual

30-minute Orientation Phone Meeting

Two 90-minute Online Training Sessions

      Open to all advisors and team members in First Step Partner's firm, and can be repeated as needed

Customization

First Step Administrative Accounts can be assigned a unique URL and customized with Partner’s company logo and colors.

Customization fee is $50 per hour. 

Additional information available by request

Click on the image above to download a copy of “Connecting Money & Life,” an article about First Step that appeared in NAPFA ADVISOR.