Pot theory of finance

The percentages indicate what bits of income go where. For personal income pots I strongly suggest using physically different accounts. The accounts I use are in brackets.

Recurring personal income

The money lands in the living costs account and is immediately automatically allocated to the respective pots.

60% living costs (Lloyds)

5% charity (Monzo)

5% rainy day (Starling)

10% fun pot (Revolut)

20% working capital pot (Santander)

Tax pot (Nationwide)

One off personal income

The money lands in the living costs account and (after allocating the expected eventual tax liability to the tax pot) is immediately allocated to the respective pots.

12.5% charity

12.5% rainy day

25% fun pot

50% working capital pot

Company profits

Company profits available for allocation are worked out on a cash basis. Payout is once a year.

12.5% charity

12.5% employee reward scheme. Payout = h/th. h = hours worked by employee; th = total hours worked by all employees. Ivan is logged at 80 hours per week.

25% shareholder bonus

50% working capital pot