The Simple, But Tough Part of Financial Planning
BY: ETHAN LOHR, CFP® — December, 2025
One of the most interesting things I’ve discovered through years of financial planning—across households of all types—is that nearly all good planning revolves around a single core element: cash flow.
Every household, regardless of life stage, has some equation of money coming in and money going out. Whether it’s a single person in their 20s starting their first job or a couple in their 60s with millions saved for retirement, the planning question is fundamentally the same: Does what’s coming in support the life we want to live?
For someone early in their career, that question often centers on preparation for the future. Will today’s decisions support tomorrow’s goals—buying a home, replacing a car, funding private school or college, paying down debt, and eventually retiring from work?
Interestingly, retirees are solving for the same thing: their tomorrow. The difference is simply what that “tomorrow” includes—travel and hobbies, charitable giving, helping family, maintaining independence, leaving a legacy. And, life being cyclical as it is, maybe even paying for a grandchild’s college or replacing an aging car.
What has changed is the source of income. Instead of a paycheck, money now comes from Social Security, pensions, IRAs, and 401(k)s. But the equation itself hasn’t changed. Financial planning still lives at the intersection of what comes in and what goes out.
So, if planning centers on cash flow, how do we plan well?
By knowing it.
Income is often the easier side of the equation. For working households, it’s typically verifiable through paystubs, tax returns, or bank deposits. For retirees, income can be more complex—and that’s where we spend much of our time helping using the Four Buckets.
The harder piece, for nearly everyone, though, is understanding the cost of their lifestyle. What does it actually take to fund your life each month?
That sounds simple, but it’s often the most difficult part of financial planning. Why? Because without a system in place, spending becomes subjective. It’s based on a rough guess, the last few months, or what we hope next month will look like because the previous was so bad and abnormal. What should be an objective number turns into a moving target.
As we look ahead to the coming year, this is an opportunity to reset and make this part of planning easier—for you and the plans you're looking to create.
Let’s know what we spend.
Thanks to digital banking, credit cards, and electronic transactions, the data already exists. The missing piece is usually just a system to capture and organize it.
That’s where tracking tools come in. There are several excellent budgeting and spending-tracking options available today—many of them costing less than a Netflix subscription—with a high potential for having a greater impact on your life.
Here are a few worth checking out.
How to Get Started
Pick a tool.
Take a look at a few of the options available. Browse each website, watch a short YouTube walkthrough or two, and choose one that feels intuitive to you. The “best” tool is simply the one you’ll actually use.Create a login and link your accounts.
Start by connecting the accounts your bills and everyday spending flow through—checking, savings, and credit cards. This is where most of your spending lives.Set up categories
Use the categories the app provides as a starting point. Add some, remove others, and adjust them to reflect your life. Then assign an amount to each category based on what you think, hope, or know that you spend. This is where ballparking is fine!
And remember: we’re tracking, not budgeting—at least not yet. Tracking is about awareness. Budgeting comes later, when you begin setting targets and intentionally changing behavior.Stay on top of sorting.
At a minimum, set one day each week to log in and sort transactions or even better, build it into your daily rhythm like checking the news. The key is consistency. It’s no fun going back through two months of transactions trying to remember what that $13 transaction on Amazon actually was.Give it time.
After a few weeks—and especially a few months—you’ll likely be surprised by what life actually costs. That clarity is powerful.
From there, real planning becomes possible. Not guesswork. Not assumptions. But thoughtful decisions—whether for yourself, your household, or alongside folks like us helping guide the process. See you in 2026!
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