The Simple Cash Flow Plan

September 4th 2018 | Posted in Blog, Financial Planning

To me, the word budget is not a friendly one. It sounds restrictive and limiting. So when I discuss this topic with clients I prefer to use the term ‘cash flow planning’ instead. Isn’t that more elegant?

For our fall blog series, we will be focusing on Household Cash Flow Planning, digging into the tools and strategies we recommend to our clients to create sustainable tracking of your financial goals.

Developing a cash flow plan can feel cumbersome and intimidating. Many methods end up producing an endless list of sub-categories that make it extremely time-consuming to track month-to-month cash flow. For this reason we discuss with our clients a simplified process that allows for easier adoption and tracking of a cash flow plan. We believe that a plan is only as good as the execution and have designed our process to make execution as easy as possible.

Our simple budgeting process has been adapted from multiple sources and breaks cash flow into five distinct buckets:

  • Owing – Taxes
  • Giving – To charity and to others
  • Saving – To all sources
  • Living – Mortgage, debt service, utilities, etc.
  • Spending – Discretionary spending

Instead of breaking up your most recent purchases from Target into 4 different sub-categories, our process throws all of your discretionary spending into one bucket, allowing you to stay on top of tracking much more easily. Through our online Master’s Wealth Manager portal, you can visualize your cash flow plan and get a snapshot of your progress in real time.

To successfully execute on financial goals and objectives, we believe simplicity is key. In the next few blog posts, we will dig into the various items to consider when creating a cash flow plan. We hope they are relevant to you as we continue to be a partner in your financial success!

Garrison R. North | CFP® Managing Partner

Email Garrison R. North

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