Understanding your cash flow is central to any financial model. Cash flow has two sides: income and expenses. This guide focuses on the expense side, covering the information we ask for, how we organize it, and why the categories matter.
For this initial exercise, we just need a reasonable picture of where your money goes. Below we break down the categories of expenses and provide a tool to help organize your information, though you're welcome to share it however works best for you.
Ready to fill it out? Open the expense toolHow We Categorize Your Expenses
Our Initial Categories
Our initial work begins with six core categories to populate a financial cash flow model of expenses, though we will get more granular as your plan develops and we identify areas worth isolating. We use categories because each one has a different impact on the forecast. Here's a quick overview of each one and the information we ask for.
Loans and Debt
Mortgages, car loans, student loans, home equity lines: anything with a balance, a rate, and a payoff date.
We include all the information about the loan, not just the payment, so when the loan is paid off it's automatically reflected in the plan.
What we need
The original loan amount, original term, current balance, interest rate, monthly payment, and remaining term.
Balance
$387,000
remaining principal
Rate
6.75%
fixed, 30-yr
Payment
$2,910
per month
Payoff
Mar 2041
15 yrs remaining
How a modeled loan is automatically removed from the plan at payoff. No manual adjustment needed.
Property and Asset-Related Costs
Expenses that exist because you own a specific asset: property taxes, homeowners insurance, HOA fees, condo fees.
We keep these linked to the asset so that if we model a future sale or downsize, these costs drop off cleanly.
What we need
The annual or monthly payments for each property you own.
Known Future Expenses
Large, one-time costs you're already anticipating: college tuition, a home renovation, a vehicle purchase, a wedding.
It doesn't have to be exact. We can help you refine the numbers, especially for education costs.
What we need
Your best estimates of the cost and the timeframe.
Insurance and Healthcare
Life insurance premiums, disability, long-term care, health insurance, including Medicare premiums if applicable.
We model healthcare expenses with a separate inflation assumption, so keeping this category distinct matters more than it might seem.
What we need
The annual premium for each policy. If premiums are deducted directly from a paycheck or Social Security benefit, just let us know.
Everyday Living Expenses
Everything else: groceries, utilities, dining, gas, clothing, entertainment, subscriptions. This is your lifestyle baseline.
You don't need to itemize every category. If you've never tracked this closely, a reasonable estimate works fine as a starting point. We can always refine it as we go.
What we need
A single monthly or annual number you feel comfortable with.
Your baseline
$9,500
per month
Grows with a general inflation assumption over time, separate from healthcare costs.
Everything in this category collapses to one number, your lifestyle baseline, which grows with a general inflation assumption over time.
Discretionary / Lifestyle Add-Ons
Regular expenses that are real but flexible: an annual travel budget, club memberships, a boat slip, charitable giving. These are things you plan for and enjoy, but could adjust if needed.
We model these separately because they give us a useful lever. If we ever need to stress-test the plan, these are the first place we look before touching anything essential.
What we need
The amount and frequency for each item.
Sharing This With Us
However it's most convenient for you.
Some clients send a quick email with rough numbers. Others prefer to sit down and walk through it together. We also have an online tool you can use to submit your expenses directly; it follows the same categories and takes most people about 15 minutes.
Quick Email
Send rough numbers for each category. We'll map them in and follow up with any questions.
Sit Down Together
Walk through it in a meeting. Works well if you'd rather talk it out than fill out a form.
Online Tool
Use our expense intake form — follows the same six categories, takes about 15 minutes.
Start wherever you're comfortable. We'll fill in any gaps together.
Open the Expense Tool →
