Now that the dust has settled from the Great Recession and people are finding the courage to look at their investment statements once again, a new reality is setting in for many people as well as many new questions.  How do I retire with enough financial security so I don’t have to worry about money and how long will it take to rebuild my nest egg?

It’s hard to know how long it will take for the stock market to fully recover and the same holds true for the real estate market. Even jobs that once felt very secure no longer feel that way in this post crash economy. With so much out of your control, what can you control? The answer is and always will be your spending.

Remember, saying you have a budget is one thing, but actually monitoring your cash inflows and outflows is a whole different ballgame.  Many people love to say they have a budget. It makes them feel good, it sounds good and it often provides a false sense of comfort. It typically goes something like this: You put all your projected income and expenses down on paper or use Quicken or QuickBooks to print out your budget for 2009 - and voilia!, you now have a budget. This budget gets put on a shelf somewhere never to be seen or heard from again.

Compare that to an actual vs. projected budget or as I like to call it a cash flow plan. With a cash flow plan, (which, by the way, forms the core of your financial plan) you are monitoring the variance between your projected income and expenses and your actual income and expenses.

You can do this exercise on a monthly, quarterly or semi-annual basis and that's where you can see in real time how you’re doing in terms of meeting your financial goals. When unexpected expenses throw your cash flow plan off course, you can quickly course correct, readjust your assumptions and get back on track quickly.

Part of the reason so many people feel anxious around their personal finances is the feeling that they’re not in control, that external circumstances are controlling them and not the other way around.

Is it easy to monitor to your cash flow, actually track the difference between actual and projected income and expenses? No way, it’s extremely challenging for most people. It requires discipline and commitment. It’s a habit that needs to be formed and it takes practice, practice and more practice to form a long lasting habit.

If you’re someone that finds themselves stressing about money more than you would like, then you should develop a cash flow plan and monitor the plan on a monthly basis. Treat your income and expenses as your business and name yourself the CFO of your company. You wouldn’t let a month go by in business without monitoring your cash flow results. If you’re feeling lazy and this seems like too much work, use www.mint.com for designing your plan and you’ll receive email alerts notifying you of when you go over budget.

After 3 months of diligently monitoring and tracking your cash flow, check in with yourself and see how you feel. My guess is you’ll feel empowered and feeling empowered is one step away from feeling peace of mind around your money.

To all my clients that monitor their cash inflows and outflows on a regular and sustained basis, keep up the good work! You’re on the road to financial independence.