The Dreaded Household Cash Flow Discussion and How It Works

How much does it cost you to live each month? Answering that question should be easy for every adult, but most people have almost no idea how much they are actually spending.

When it comes to creating a budget, the importance of knowing your “monthly nut” is inarguable, yet discovering this number always seems to alarm people. The prospect of tracking and figuring out monthly expenses leads to an inevitable look of dread when I assign this task to new clients. I equate it to getting on the scale. People know it is important, but they don’t want to have to face what they spend per month. The task is a little less daunting with the help of our Monthly Nut worksheet.

From my perspective, and similar to the scale, your monthly nut is simply a data point. A family might spend a lot per month, but they might be saving a lot, too. The key thing is to not to have any judgements around the number when approaching this project.

How to go about figuring your number out?

Your monthly nut includes all the money you spend, divided into three general categories.

Monthly fixed expenses + average monthly variable expenses + monthly obligations = Your Monthly Nut