When I tell advisors that there are going to be new rules of the road for American citizens, that the future belongs to those who practice appreciative living, gratitude, forgiveness and who actually manage to live a better life by not barking up the tree of consumerism, there's often a huge sigh of relief and a sense of enthusiasm about how to lead clients in this direction.

This is the kind of thinking that comes naturally to Pamela Christensen, CFP, who practices in Sacramento, Calif. For the past 15 years, Christensen has been pioneering what may be an emerging service in the financial planning marketplace: detailed, line-by-line budget planning for her clients.

"Budget and cash flow make up about 60% of what I do with clients," she says, adding that this could be, quite literally, anybody. While some commentators lose no opportunity to suggest that you restrict your advice to high-net-worth individuals, Christensen's clients include a divorced woman with two teenage girls and $40,000 in debts, who, when she first engaged Christensen, earned $500 a month less than she spent. At the other end of the spectrum is a couple who, together, earn over $500,000 a year, and who, after the market downturn, realized that maybe they should start saving money. But they're asking themselves: Where is the cash going to come from? You probably know someone like that.

"We can't change what happened in the markets," Christensen says. "So our conversations revolve around where we go from here. Whether it's a retiree living on what is left of her portfolio, or a pre-retiree who has five years to catch up to where she was a year ago, we're trying to figure out what we can do with what we have. Is there a way to subsidize their income by doing something they love? Can they get rid of one car and carpool to work? Now we have to be willing to make choices before the choices force themselves on us."

For pure budget and cash flow work, Christensen will charge $75 an hour-which sounds low but, she says, is appropriate for people fairly deeply in debt. Often, as they dig themselves out, those clients will refer friends and relatives who have assets to manage-and those individuals are charged 75 basis points. "I am underpaid, compared with a lot of others in the business," Christensen admits. "But I follow my own advice and live frugally, so we have a terrific life. It's actually a lot of fun."

Her engagements usually start with clients' filling out a detailed budget sheet, tallying monthly expenses for rent, mortgage and other housing costs, groceries, insurance, electricity, gas, phone, cable, entertainment, etc. If clients can only account for some of what goes out the door each month, Christensen will have them bring in bank and credit card statements and the checkbook register-or, alternatively, ask the clients to keep a running ledger on every dollar they spend for a month.

Then Christensen will compare those expenses with national average expenditure data from the Bureau of Labor Statistics and Barna.org, and highlight places where her clients are spending more than the norm. "The average housing allowance—mortgage, insurance, taxes, utilities, everything it takes to run a home—should be no more than 36% of your income," she says. "If somebody has 50% of their income going toward their house, I ask them, how important is your house? If they're spending $4,000 in first and second payments, it may be worth short-selling it, because that's two or three months' rent in a nice neighborhood."

Transportation typically costs 12% to 15% of the overall budget (this includes the price of the car); and groceries normally run another 10% to 12%. On average, people spend $150 per adult per month on groceries. "If they're spending $900 a month for a family of three," Christensen says, "something is not right."

ODDBALL EXPENSES

The problem with many budgets is that they leave out oddball (more accurately, periodic) expenses like car maintenance, yearly auto registration or vision care. "People don't buy glasses every year," Christensen explains, "but when they do, it costs $300 to $600 for frames. Tax preparation could cost $500 or more. If they have a new car, I have them save $25 a month for maintenance, $50 if it's an older vehicle."

Christensen also doesn't recommend buying a new car every couple of years. "The prime value for your money is between years two and seven," she says. "We set aside funds every month so there's money for a new purchase when the car is falling apart."

Other line items: medical co-pays, chiropractors, counseling, recreation and entertainment. This is where the conversation becomes interesting. "I talk to them about the big expenses," she says, listing summer camp for the kids, hobbies like skiing and golf. And pets. "You can't say, get rid of your pets," she says. "If money is really tight, you just suggest that when pets go, don't replace them."