Poll: How Much of Your Spending Is Actually Flexible?

[Onda]

It is useful to know what percentage of spending is core living because it shows how flexible a person’s budget really is. If core living is a small share, most spending can be reduced if income falls or markets decline. Core living typically includes housing costs (HOA, property taxes, utilities, insurance, mortgage), food, health insurance and medical expenses, basic transportation, and essential services or subscriptions.

Anything else is flexible play money.

 

[Steelpony]

I finally found out (the easy way?) during those months of Covid. My discretionary spending was about 1/3. Core was about 2/3.

 

[Dtail]

I keep track of this number each year. Currently 35% discretionary.

 

[old medic]

Core vs discretionary? Hamburger Helper Vs Ribeye. Fix old stuff Vs Buy new, We could survive on about 30% but enjoying the ride.

 

[WhenIsItTime]

I counted income taxes from capital gains. I can shut it off if need be.

 

[Onda]

Core vs discretionary? Hamburger Helper Vs Ribeye. Fix old stuff Vs Buy new, We could survive on about 30% but enjoying the ride.

The question asks: "core".

If you usually eat Ribeye than Ribeye is your core spending. If your ACA is usully platinum plan than that platinum plan is your core spending.

 

[Onda]

I am suprised so many people have 20-30% core spendings. That leaves them with 70%+ fun money.

 

[old medic]

I am suprised so many people have 20-30% core spendings. That leaves them with 70%+ fun money.

That was my point about Core vs discretionary. Our single largest expense is our truck payment. Didn't "need" it. Payment is $684 But we pay $1000. As I had said in the other poll we spend nearly 100% our monthly income.

 

[Flyfish1]

Big travel budget so that puts core at 22%.

 

[frank05]

Core vs discretionary? Hamburger Helper Vs Ribeye. Fix old stuff Vs Buy new, We could survive on about 30% but enjoying the ride.

That is not how I treat the question. Flexible items are luxury travel, buying new cars when old ones drop manufacturing warranty and treating family to get togethers.

 

[Onda]

That was my point about Core vs discretionary. Our single largest expense is our truck payment. Didn't "need" it. Payment is $684 But we pay $1000. As I had said in the other poll we spend nearly 100% our monthly income.

You have a car payment. It is core spending, not fun money that you can spend on anything you like.

 

[racy]

Does "core" mean taking the bourbon out of the food expense?

 

[old medic]

You have a car payment. It is core spending, not fun money that you can spend on anything you like.

I included the basic payment in our core spending. We have several accounts that have $0 monthly payment because we have paid way ahead on them. New ATV I've made 2 payments... last statement said my next payment is due in August...

 

[old medic]

Does "core" mean taking the bourbon out of the food expense?

No... its Evan Williams Vs Angels Envy... LOL

 

[Onda]

Does "core" mean taking the bourbon out of the food expense?

If you always/customarly have bourbon, then it’s part of your core spending. If you live in a luxury apartment in Manhattan, that is your core spending.

If you live in an inexpensive place in Thailand, then that is your core spending.

 

[Surewhitey]

The 3 big "extras" are personal (spa), travel and home cleaner @~$20k of the $72k...

 

[Taco]

If you always/customarly have bourbon, then it’s part of your core spending.

If you splurge and drink $100 dollar a bottle bourbon but could/would easily cut back to a $30 dollar bottle if times were tight, than $70 is discretionary.

I think that was OldMedic’s point, which seems reasonable to me.

 

[NW-Bound]

As is with most people, my expenses are quite lumpy, both essential and discretionary. For example, I don't do a 6-week European trip each year. I don't spend $16K on dental implants each year. I don't pay cash for a new car each year.

So, I looked up Quicken for expenses over the last 5 years for data smoothing. Looking at the categories, I identified Travel and Gift/Charity as the obvious things that are not essential. It works out to 27% of the total. I did not count the expenses of my 2nd home as discretionary.

Note that my total does not include income tax, because a big part of it is for Roth conversion, and that is also discretionary.

PS. The forum went though this kind of polls during the subprime mortgage crisis. And it helps to know the minimum one needs to survive.

 

[ShokWaveRider]

This made me consult my final budget spreadsheet for 2025 (and add another metric). I voted 70-80%. I calculated it by taking Mandatory expenses and dividing it by total income %, then subtracting the result from 100%. But we rarely use all of the variable spending in any given year.

 

[OnTheBeach]

My travel, dining out, housing renovations, new cars are about 40% per year.

 

[CRLLS]

Funny. We can't even agree on what CORE expenses are.

If I were to go back 5-10 years when I first did the Fidelity Retirement planner, I entered detailed expenses, most were core except for things like Dish TV and the fun car expenses, things that could be eliminated it the S.H.T F. I added an equal amount as discretionary things. We haven't touched the investments yet except for RMDs. using the very rough 4% rule, we could withdraw another 100% from our retirement investments above our current income. So would I vote 50% or 40% or 30%

 

[old medic]

Funny. We can't even agree on what CORE expenses are.
We haven't touched the investments yet except for RMDs. using the very rough 4% rule, we could withdraw....

It is funny...... 4% of what we have now would cover minimal expenses. I'm talking dried beans and water...

 

[stepford]

It's so variable that it's hard to put a number on. In a 'quiet' year it might be 70+%. Last year, with a longer overseas trip and some home remodeling thrown into the mix it was more like 15%. I chose 30-40%, but could have chosen almost anything else with equal validity.

 

[Car-Guy]

I don't track such stuff at all. BUT, a Wild A$$ Guess, after tax is ~25%.

Or in other words, I could probably live on 25% of my current annual spend if I really needed to cut back, especially on my hobbies/habits.

 

[Lorenzo]

I am suprised so many people have 20-30% core spendings. That leaves them with 70%+ fun money.

I have a "core spending" category in my spreadsheet, and every time I look at it I wonder if it is a useful distinction and, if so, did I draw the line between "core" and the rest of the spending at the right place on the spectrum?

I consider "fun money" way at the far end of the spectrum. At the near end of the spectrum is basic survival needs--food in just enough quantity and nutrition to feel good about it, property taxes and basic maintenance of our residence, basic medical coverage, maybe maintaining our two-car lifestyle, etc. Farther along the spectrum--still way before we reach "fun"--there are things that go beyond the basics but help make life more comfortable.