We have only based our finances on after tax income.
At the end of the day these are the dollars that we have. Pre tax is a little meaningless to me when it comes to a spend budget.
+1. Looking at pre-tax #s always depressed me, LOL. Unlike some folks, I don't quibble with what the government did with the $$$. My father was on SSDI for almost 30 yrs after developing Parkinson's, so I figured my SS withholdings were helping to support him.
We were much more fortunate than most as Spouse had a government pension coming if he lived long enough - something that wasn't for certain after he had a moderately severe stroke at age 50 - but he fought thru it and recovered, was back at work in 2 months and worked until he was 57 when he was eligible for full benefit ER.
As his pension covers all our overhead costs in a HCOL area, any overhead costs plus discretionary expenses are paid by my much smaller pensions, my SS (Spouse falls under WEP so we will wait until he is 70 before applying), and a modest 3% distribution from the portfolio.
Overhead costs include a small new 1st mortgage taken out in Jan 2021 when interest rates were 2.75%, to free up some equity (our CFP firm agreed it was a good idea as a couple of large home maintenance projects are planned), plus all insurance including umbrella, quake, and individual LTCi policies. We have a specific savings account with auto monthly transfers going in, for property taxes which are paid 2x/yr.
"Discretionary" is my category for anything where we could easily cut back expenses, if necessary. Discretionary income covers food, dining out (major expense; it's my hobby), charity donations, and monthly transfers to an on-line savings acct that I use as an "extra" back-up in case of emergencies. The latter I raid once or twice a year so it stays below $3K for the most part - last time it was for a new Samsung laptop for Spouse.
He clings to his old tech stuff even when it barely works, so I considered it a major victory I managed to talk him into finally buying a new one...but of course, he still kept his old ASUS tablet (which he cusses at every day) as he can carry it around the house more easily, using wireless headphones as he listens to YouTube podcasts!