A Vital Financial Tool: Your Detailed Budget 

Whether you need to do more with less, create a financial plan or calculate the cost of your dream retirement, there is one tool that can help. Some might say it is the cornerstone of financial security: a detailed budget.

Tracking Essential and Discretionary Expenses

To reach any financial goal, you need to understand how much money you have, how much you absolutely need, and how much could be set aside for the long term.

Consider retirement. Before you retire, you need your monthly income to go as far as it can to cover expenses and build retirement savings. You also need to estimate what retirement will cost so you can be sure your savings are on track. And when it’s time to transition into retirement, you want to know, with certainty, that you have enough to cover your essential expenses for as long as you live.

It all comes down to your detailed monthly budget. Specifically, it means deciding what is essential (must have) and discretionary (nice to have).

The following are the core categories that comprise a monthly budget. Start by estimating your monthly expenses in each category and divide the amounts into “essential” and “discretionary.” Calculate your pre-retirement budget, to find where you can save more, and follow the same process to identify what would be essential and discretionary expenses in your ideal retirement.


Include all mortgages and housing expenses including repairs, trash pick-up, furniture, association dues and real estate tax.


Include electricity; gas/oil for heating; communication including phone, cell, internet and cable; other expenses including water and sewer.


Include auto loans or leases, gasoline, car maintenance, licensing, tolls/taxes and parking.


Include homeowners, automotive, health insurance as well as deductibles and co-insurance, life insurance, and other insurance including umbrella, disability, long-term care, dental and vision coverage.

Food and Entertainment

Include groceries, dining out, travel and other entertainment such as shows, hobbies and related expenses.

Other Loans and Legal Obligations

Include credit cards, personal loans and other payments including alimony, child support and judgments.

Miscellaneous Expenses

Include fees and dues such as health club/spa and education, grooming expenses such as hair and makeup, clothing and other expenses.


Include charitable gifts to church/synagogue/charity, holidays/birthday celebrations and gifts, other gifting and contributions.

Your detailed budget is the starting point for determining your next steps toward financial security. Contact a financial representative for guidance in creating your budget and using it as the basis for your own personalized financial security plan.