To feel safe about your finances, it is important to know how much time you could survive if your cash flow stops today. To calculate this, Decent Budget has a special category label called “Essential”.
When you create expenses using essential categories, Decent Budget will group those expenses and display that information in essentials report. There you’ll find your historical essentials spending data and other information, like essentials percentage.
This depends of every individual, but some of these could be considered essential to everyone:
- Rent or mortgage payments
- Housing utility bills (electricity, heating, water & other administration costs)
- Phone & internet bills
- Insurance payments
- Credit card payments
Essentials are those expenses, that usually happen every month. Having large irregular expenses (for example, taxes) would make average essentials amount inaccurate. For those expenses we recommend creating a vault and plan for them in advance.
To make essentials work, you need to change your existing category to be treated as essential.
- Click “Categories” in navigation bar.
- Click on a category that you want to make essential. For this example, we will use “Bills” category.
- On the right side click “Actions” and select “Edit”.
- Check “Essential category” checkbox and save.
In reports page there is a report called “Essential expenses”. It will show you current and historical data of your essential categories.
Essentials this month show what percentage of your total expenses were essential (were used with essential categories). Having essentials this month at 100% means that all your expenses were essential.
Time until dry shows how much time you could survive living only on essentials if your income stops today. This number is calculated by dividing your current reserve balance from average essential expenses amount. (you can click question mark to learn exact numbers)
Below that, you’ll see a chart that’ll show visually your total expenses every month and compare that with essential expenses amount. Chart currently shows only last 12 months data.
Finally, there is a table which shows exact amounts from all months.