Broker Check


July 28, 2023

Few among us enjoy the process of going through spreadsheets.  I think we all know budgeting is important, but most folks I meet with don't actually know their expenses until we start working together when I have them complete an expense worksheet or link their accounts to our financial planning website and we review through the budgeting tool found there. 

As much as budgeting can seem like a daunting task that is a complete thief of joy, I can assure you it's actually one of the most empowering things you can do!  I've had a good number of clients tell me that simply going through the process of understanding their current financial position (assets, liability, and cash flow) is one of the most beneficial things they've done! 

I'd like to suggest a reframe to budgeting that I often pose to my clients: Budgeting is not about restricting how much money you spend.  It's about choosing how you spend money so you can spend more on the things you want. 

So... how should you get started?  There are plenty of ways to go about it, but I'll suggest 3 methods:

  1. Itemize your expenses.  Basically, go through all of your expenses, add up each one, and write them all down. Don't forget your discretionary expenses!  If you usually go out with your co-workers for a coffee or cocktail once a week, or if you buy your lunch from a cafeteria, or if you have a couple of date nights each month, that needs to be counted! It's not necessarily a bad thing, it's just a lifestyle expense you should account for.  If you'd like, send me an email and request an Excel worksheet you can go through to suggest all sorts of different categories.
  2. Reverse engineering.  Look at your paycheck and take that amount that gets deposited every pay period, subtract your liabilities (mortgage, car payments, etc) and other necessary expenses (insurance, rent, gas, utilities, savings).  Notice how I included savings?  Your long-term savings should be a necessary expense - pay yourself first! You now have a pretty good idea of what's left over to choose how to spend or invest. 
  3. Use an App! There are quite a few free or low-cost budgeting apps that you can connect all your accounts to (You Need A Budget, Mint, GoodBudget, etc.). If you'd like to try a demo of our financial planning website that has a budgeting tool, send me an email and ask me for a personalized link to eMoney.  You can link your accounts and use the budgeting tool for a short period to see if it's useful.  We can't see your spending data unless you give us permission in the settings. 

Once you've worked out your spending and are thinking of different things you can do with your discretionary dollars, make sure to consider how you can make your money work for you.  These dollars can be put to work to help you retire earlier or invest to grow your wealth! 

If you'd like to see how different decisions may pan out in the future, that's where financial planning can really help.  You can see the impact of different decisions and have an expert showing you different strategies to lower your total tax liability, increase returns, manage liquidity, and plan for things you may not have thought of. 

If you want to schedule a time to review what the financial planning process looks like and understand the costs associated depending on your situation,  us the Contact Us page, give our office a call at (860) 544-5729, or go directly to our scheduling page