If you’re like the many folks who set resolutions this year, I hope they’re going strong. The idea to set an intention and stick with it is admirable, and sometimes lofty. If you’ve tried to set some sort of financial goal for yourself, such as reducing spending or increasing savings, you’re not alone. It tends to be one of the top resolutions year after year and often one of the most challenging to conquer.

As life continues to get more expensive, it’s easy to feel like finances can quickly get out of sorts even at the beginning of a new year. Instead of getting bogged down or feeling behind, understand that prioritizing financial health requires a system, not just limitations. 

We frequently share that indulging in gourmet coffee or avocado toast isn’t the type of purchase that’s going to steer our clients off course. Rather than focus on details, which can feel overwhelming, we recommend a simple, hierarchical cash management approach that focuses on alignment over restriction. Here are some thoughts on how to get started.

1. Giving back to others

Starting here ensures impact isn’t just an afterthought, but a priority. More than just a financial decision, it’s a fulfillment one. Plus, we believe generous people live happier lives. 

2. Saving for your future self

While cash flow looks different for everyone, we typically recommend saving between 15-20% of income for future needs and financial independence. Delayed gratification can be tough, but your future self will be appreciative!

3. Spending in the now

This bucket covers essentials–housing, utilities, groceries–and hopefully some fun things too. Because the dollars in the first step have been intentionally assigned, this bucket can be spent guilt-free.

Helpful Tools

Again, while we don’t obsess over the price of a latte, noticing habits and digging into details is necessary to pinpoint opportunities for improvement. If that’s the case, or if you simply enjoy tracking it all, there are some great applications available.:

Monarch: Award-winning platform for best overall and ease of use

Copilot Money: Optimized for Apple users with sleek navigation 

I’ve personally explored both and see why they’re such successful platforms. Find one that can work for you. Most usually offer free trials to test things out.

Final Thoughts

Maybe you’re already using this “reverse budget” approach, in which case - job well done! But if this feels like a daunting challenge, remember that changing habits takes time, intention, and probably even accountability. 

Have questions about how to manage cash flow, pay down debt, or save for your future? We’re here for you. Feel free to schedule time with us to discuss how we can help.