Your Monthly Nut and Why It Matters

Money is always listed as one of the top reasons for a divorce, and the biggest conflict typically centers around the relatively straightforward issue of cash flow and expenses. Who spends how much on what?

Your “monthly nut” is simply what you and your family spend each month. It is made up of three key pieces:

Fixed expenses — These are your family’s main “operating expenses” — things like housing, utilities, groceries, going out (occasionally), etc. that let you function on a daily basis.

Variable expenses — These expenses are less predictable and, to some degree, less critical: travel, bigger situational clothing purchases, books, furniture, etc.

Debt — This category includes every kind of debt — credit cards, vehicle, homes, etc.

Figuring out a client’s monthly nut has almost become like a game show contest for me. I can usually estimate someone’s monthly nut within $1000 just by knowing their income and approximate savings.

To be clear: I don’t do budgets. And while I don’t care how much your monthly nut is in the sense that I won’t judge you for the amount you spend (no need to camouflage your enormous wine and comic book costs!), I do care about having an accurate picture of this number. Knowing your monthly nut allows me to properly build all…