Now that you’ve completed your Net Worth Statement and Cash Flow Statement, it’s time to build your Spending Plan.
Let’s be real: a spending plan is just another word for a budget. But I use spending plan because words matter.
“Budget” feels like restriction. Limits. Sacrifice.
“Spending Plan” feels like control. Choice. Power.
You’re deciding where your money goes. You’re directing your energy toward the life you want. You’re in charge.
“The bigger the ‘why’, the easier the ‘how’.” — Jim Rohn
This post is about the how.
The mechanics. The spreadsheets and structure.
The visioning and goal-setting—the why—comes later. That’s a separate pillar of my approach. (If you want to see how vision boards helped drive my own journey, check out the my about page.
But for now, let’s keep focused. This is process, not dreams.
Inflows
Start with your income—salary, business income, side gigs, passive income. You’ve already listed it in your Cash Flow Statement. Just carry it over.
Taxes
Same thing. Copy/paste your total tax payments.
Savings & Investments
Now we pause—because this is the whole point of a spending plan.
Your goal is to push as much money as possible into this category.
This is how you gain freedom. This is where leverage lives.
You only have two ways to create more room:
- Increase your income
- Reduce your expenses
That’s the whole game.
Fixed Outflows
These are your more rigid monthly costs—mortgage, auto loans, insurance, property taxes. You have some flexibility here (refinancing, relocating), but those moves often require major lifestyle changes.
Variable Outflows
This is where you find the real leaks. In my nearly three decades of helping clients, I’ve seen this over and over:
People don’t truly know what they spend on groceries, restaurants, entertainment, subscriptions, shopping, etc.
And the little things? They add up fast.
Example:
Me and Kerry grab takeout coffee almost every day. In Bozeman, our go-to is literally called The Daily.
With tip, it comes out to about $8 per day—roughly $240 per month. We’ve decided it’s worth it. We enjoy it, we can afford it. We love the kids and the vibe.
But we’re also crystal clear about what that habit costs us over time.
The Math
| Annual Return | Future Value | Total Deposited | Interest Earned |
|---|---|---|---|
| 0% | $29,220 | $29,220 | $0 |
| 3% | $33,981 | $29,220 | $4,761 |
| 5% | $38,395 | $29,220 | $9,175 |
| 7% | $43,524 | $29,220 | $14,304 |
| 10% | $51,000 | $29,220 | $21,780 |
This is a hypothetical example and is not intended to represent any specific investment or account. As seen in the table above, one small daily habit can potentially lead to thousands of dollars in lost interest over time.
Based on the table above, the trade off for one small daily habit can end up being thousands of dollars.
Am I saying don’t get coffee? No.
I’m saying: be conscious of the tradeoffs.
- Is it worth staying in debt?
- Is it worth delaying that home you want?
- Is it worth having to work until 75?
You get to decide. My job isn’t to tell you what matters to you—my job is to help you get there once you decide.
The Net Cash Flow Formula
Here’s how the numbers break down:
Net Cash Flow Formula
+Total Inflows
-Total Taxes
-Total Savings & Investments
-Total Fixed Outflows
-Total Variable Outflows
=Net Cash Flow
Target: Net Cash Flow should be zero.
Why? Because every dollar should have a purpose. There’s no such thing as “extra money.” That’s your time. Your energy. Respect it, direct it, and let it serve you.
“Money is a terrible master but an excellent servant.” — P.T. Barnum
In Closing
You can do this.
Like learning any new skill, it feels awkward at first. You know I love skiing. I started at 18 months, so I don’t remember struggling. But I’ve taught enough people to know—it’s not much fun in the beginning. You fall. A lot.
But once you know how to stop and turn, it becomes a completely different experience.
You don’t have to “send it” to have fun. But confidence changes everything. Same with your finances.
- Control leads to confidence.
- Confidence leads to freedom.
- Freedom leads to creativity.
This is the foundation that supports your bigger vision—whether that’s launching something bold, living on your terms, or simply sleeping well at night.
So build your plan. Point your energy in the right direction. And start living like you mean it.
