All of your normal livings costs are considered life flow. This includes everything from a coffee at your favourite coffee shop all the way to your annual golf membership. In order to come up with your life flow you will need to look at bank statements, credit card statements, and keep track of where that cash in your wallet went. Not understanding your true life flow leads to overspending which leads to stress and can even ruin relationships. Life flow is also different for everyone and it’s related to what stage of life a person is in. Young adults have a completely different lifestyle than middle-aged adults, but understanding your life flow is extremely important in all stages.
One of the best ways to understand your life flow is to review and enter every month’s expenses on a spreadsheet and compare from month to month. Below is a list of major categories and sub-categories to help you get started.
Click the image below to access our Life Flow spreadsheet template that is posted on our website. Use this simple template as a starting point.
Some of the things that are not part of the life flow but should be taken into account when budgeting is the following: mortgage payments, car loan payments, other loan payments, monthly investing/savings, large commitments such as home improvements, big vacations, etc. The reason these are not part of life flow is that they are either set payments such as mortgages and car loans, or they need to be part of the savings that is only used for the purpose it is being saved for.
Written by: Najib Frever