Money guide
What counts as an essential expense?
A simple way to separate the bills you need from the spending you can pause when income changes.
Why this matters
When you plan for a job loss, you need a clear view of the money you must spend each month. If you count every purchase, your runway may look shorter than it is. If you leave out important bills, it may look safer than it is.
An essential expense is a cost that keeps you safe, housed, fed, healthy, and able to meet important responsibilities. It is not the same for everyone. Your household, location, health, debt, and work situation all matter.
Costs that are usually essential
Most people start with housing, basic food, utilities, transport, insurance, health costs, and minimum debt payments. Add costs for children, dependents, or family members who rely on you.
- Rent or mortgage payments
- Basic groceries and household supplies
- Electricity, water, phone, and internet
- Transport needed for work, school, or medical care
- Health, home, car, or other required insurance
- Medicine and regular health care
- Minimum payments on loans and credit cards
- Childcare or support for people who depend on you
Costs you may be able to pause
Some spending is useful but not essential during a period of uncertainty. You may be able to pause or reduce streaming services, restaurant meals, shopping, travel, premium apps, and other optional plans.
Do not cut something important just because it is not a bill. A small budget for exercise, connection, or support may help you stay well while you look for work. The aim is a realistic plan, not the lowest possible number.
Remember the costs that arrive less often
Annual and occasional bills can be easy to miss. Add them to your monthly view by dividing the expected cost over the year. Think about insurance renewals, school costs, repairs, medical visits, travel to see family, and professional fees.
Keep a small amount for unexpected costs. A plan that assumes every month will be perfect will not help when a real bill arrives.
Review the list when life changes
Your essential expenses may change after a layoff, move, birth, illness, or change in visa or work conditions. Review the list when your household or income changes. If you are unsure, make two versions: a strict basic plan and a more comfortable plan.
Use the basic plan to understand your minimum runway. Use the comfortable plan to make decisions that are easier to live with for many months.