What is a “Financial Nut”? – Health Now, Wealth Forever

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By Gary, on February 8th, 2014

Has anyone you know ever mentioned “financial nut” in a conversation?  Has anyone asked you what you need as your “nut” to live comfortably?

I am a retired professional and I was asked this question about two years ago by someone who was much younger than myself and interested in having me join him to open up a deli shop.  The questioning look on my face was a clue to him so he explained the term further.

So –

What is a “Financial Nut”?

It is actually defined by InvestorWords.com.

“A slang term referring to the carrying charge on a property; the monthly expenses that must be overcome by income in order to maintain a positive cash flow.”

In other words – how much income do you have for the essentials so you do not go negative in your cash flow?  How much do you need for housing costs to afford to live where you now live?  How much do you need for food, clothes, entertainment, internet, phone, etc?  You get the picture.  If you take your personal budget and break it down into manageable segments – those segments are called “nuts” and the sizes of those “nuts” can be managed.

If you have a budget for your car(s) then that will be your “nut” for that.  If your income is less than your “nut” something needs to be adjusted.  Maybe a bus pass or a bicycle or walk to where you need to go, etc.

If your income is less than that required for your food “nut”, adjust.  Cooking instead of eating out, use grocery coupons more, buy bulk, etc.

Good news is that you can manage each of your “nuts” to make your overall budget work for you.