Good morning!

I'm going to state the obvious...

No one (that I've met) likes budgets or budgeting.

They often involve a lot of guilt, self-recrimination, shame, and other not-so-positive feelings & behaviors.

I don't like budgets either.

In fact, I don't really recommend them.

Instead, I suggest you utilize a spending plan.

This is not simply a play on words.

Budgets typically look backwards.

For example, did I spend (or not spend) where and how I said I was going to?

Spending plans are forward looking.

Basically, you want to give each dollar of your income a job.

I'd start with savings because "pay yourself first."

Then address obligations like housing, taxes (if not deducted from your paycheck), insurance, loan payments, credit cards, etc.

Next up are your lifestyle expenses.

Paying for the things associated with being you and living your life. Gas in the car, groceries, utilities, gym membership, etc.

If you have money left over after everything above is accounted for, you have a surplus spending plan.

If you're spending more than you're earning, you're operating in a deficit.

And deficits are most often funded with more debt. This can create a vicious cycle that can be difficult to break out of.

On the surface, all this might sound like a budget.

But it's not.

With your spending plan, you have some choices:

• Sure, you can cut some expenses to free up more cash flow each month
• But you can also look for ways to earn more through your current work (I prefer and suggest this option)
• A spending plan also creates a wonderful opportunity to consider what's important to you and what your priorities are.
  • Is it more important to spend more or less today? To be clear, I'm not assuming the answer here is "less"
  • But in this context, you can also think about the "price" or cost of your current spending relative to what you want to do - or be able to do - in the future
    • This could be saving for a new car or planning for an early retirement

As I've written many times and will inevitably do again after today, it's about choices.

Trade-offs.

Opportunity cost.

But even if you're with me so far, something that can often derail the best spending plan is the erratic nature of our bills. They're due on different days throughout the month and some expenses can fluctuate from month-to-month.

But there's a solution to tame this beast of a spending plan.

I call it "synchronized spending."

Here's what you do:

1. Call each of your billing companies (utilities, mortgage, rent, mobile phone, etc.) and ask them all to move your bill to the same day of the month. Doesn't matter if it's the 1st or the 15th or the 23rd.
2. It might take a month or two for all your bills to "sync" up to the same date so be patient.
3. Once most or all of your regular bills are due on the same date, you can then set each of them up to auto-pay from your checking account using bill pay. Or you can auto-pay from your credit card, but only if you're paying your full balance each month. The benefit of your bills falling on the same day is so you can better align them with your paychecks and managing your checking account balance.
4. You can also have an amount auto-transferred from your checking account to your savings and/or investment account each month.
5. These are the crucial first steps in automating 99% of your monthly cash flow. An automation is an important part of your synchronized spending plan.

Once you've accounted for and automated all your monthly bills, have set aside money to save each month, and don't have anything else outstanding, you can spend whatever is left over guilt-free.

Want to spend it on protein shakes?

Designer shoes?

A day at the spa?

Once your spending plan is established, synchronized, and automated, and it's aligned with your financial plan - so you're saving enough but not too much...

Then you can and should enjoy your discretionary income on the things that bring meaning to your life. Or to the lives of those you care about.

OK, some of you might still think I've just described a budget.

I don't care what you call it.

But I do believe there's a lot to be achieved by knowing how much is coming in, how much is going out (and where), and how much you can comfortably spend on whatever you want each month.

And lest you think this only applies to those who are still gainfully employed, this works and is equally important for retirees too.

There are some additional details to this personal finance setup, but the concept above should get you started. And see the article below for some additional details.

Links & things

I've had conversations with a few of you lately explaining why attempting to time the market is dangerous and why I don't do it personally or for my clients. This short video provides some additional context:

• Missing the market's best days

Many of you have asked for suggestions and solutions for teaching your children good money habits from an early age. Over the past couple of months, I've heard about Greenlight from several different people. You can check it out here:

• Greenlight - debit card for kids and teens

And for more on the details of automating your finances, check out this blog post from Ramit Sethi:

• Automate your finances using technology and psychology

Thank you, as always, for reading. Want to get in touch? I can't wait to hear from you.