December 6, 2023

Nita Temei | The Moment | Getty Images

Below are excerpts from “This Week, Your Wallet,” a weekly audio show produced by CNBC’s personal finance team on Twitter.listen to the latest episode here.

Becoming a “cash flow guru” is a key element of family finances—and one of the most challenging, says certified financial planner Douglas Boneparth.

What does it mean to master this skill set? According to Boneparth, president of Bone Fide Wealth and member of CNBC’s advisory board, it’s a two-pronged concept: Knowing what it costs to finance your lifestyle and knowing what you can save and invest consistently.

“Balancing these two things is arguably the most difficult part of all personal finance,” he says.

Often times, people invest too quickly without that foundation, he said.

Investing for long-term goals is important because of the power of compound interest, “What good is investing if you can’t sustain it?” Burnpass says. Without the discipline around cash flow, there can be unforeseen life events that lead you to invest in investments you wish you hadn’t touched for years, he added.

Once families have cash flow in hand, they can set and prioritize measurable goals: building emergency cash reserves and saving for retirement, a down payment or a child’s college education, for example, Boneparth said.

More from consultants

Here’s more from the FA committee on how to navigate the economy while accumulating wealth.

Carolyn McClanahan, CFP and founder of Life Planning Partners in Jacksonville, Fla., says families feeling the pinch can check to see if they’re making any “thoughtless expenses.”

She recommends examining what households spend on necessities like housing and transportation (and making sure spending in these categories is as cost-effective as possible) and “want.” Tweak the latter category to make sure you’re using services you consume regularly, such as gym memberships and subscriptions to music services like Spotify and Pandora, McClanahan said.

Financial psychologists on stigmatization of financial struggles: 'There's no shame here'

You can put any savings — even as little as $5, $10 or $25 a month — into a savings account, she adds.

“It adds up quickly,” she said.

Savers should make sure these deposits happen automatically, preferably the day after the paycheck hits their bank account.

“If you don’t see (the extra money), you can’t miss it,” McClanahan said.