Cash Flow Planning
For the twenty years I’ve been in financial services and the thirteen I’ve been an Advice Only Financial Planner, cash flow planning has been a key that unlocked knowledge, confidence, and security.
I’ve written many times about how “budgeting” is a catch-all word that includes:
Gathering data on how much your life costs to inform future planning
Setting intentional boundaries around how much you want to spend
Creating a structure that introduces noticeable friction before you spend more than you planned, prompting you to think before you buy
Providing real-time information about how much is available to spend before you receive more income
Use whatever word you like. The important part isn’t the vocabulary, it’s the why.
How much you spend is where the rubber meets the road. It informs how you feel about your overall financial health, how quickly you can respond to emergencies, and whether you can afford to stop working.
Cash flow planning is for (almost) everyone.
If you’ve always had more than enough and haven’t had any trouble spending how you’d like while still saving enough for retirement, cash flow planning will be a key part of your eventual ability to make the psychological difficult transition from always having another paycheque coming to withdrawing from your savings to pay for your life.
If you make a decent income but struggle to save for the future and feel like you should be more comfortable than you are, cash flow planning is critical to building intention, agency, and control into your spending and saving.
If you have razor thin margins and worry that the next emergency will break you, cash flow planning is vital to using the good times to prepare for the bad.
Learn more about pay what you can cash flow planning.
***
If, no matter how much planning you do, you have to literally choose between eating and living indoors, cash flow planning isn’t particularly useful thanks to the unjust and frankly violent austerity politics of the last forty years.
You know you need secure, low-cost housing that you actually want to live in and an appropriate income that keeps you out of poverty without punishing you for it.