Audit Your Spending: Go Beyond Budgeting with 5 Ways to Review Your Expenses for Better Financial Outcomes

How you manage your expenses can make or break your financial plan — and it shapes your day-to-day quality of life, too. To take control, it helps to look at spending through a few different lenses. Below are five ways to view your expenses. Use them to audit your own spending, gain clarity on your cash flow, and strengthen your overall financial plan.

1. Fixed Expenses

Fixed expenses are the recurring costs you can count on every month — things like rent or mortgage, utilities, insurance premiums, phone and internet, property taxes, subscriptions, and minimum debt payments.

Because these costs are predictable, they’re usually straightforward to calculate and don’t vary much over the course of a year.

Time frames for fixed expenses

Most fixed expenses hit monthly (mortgage, rent, utilities, gym membership), but don’t forget about less frequent charges like annual or semi-annual insurance premiums, vehicle registration, or your Amazon Prime renewal. Adding these to your budget avoids “surprise” bills.

Rule of thumb for fixed expenses

If you are still working, a good rule of thumb is to have no more than 50% of your monthly after-tax income allocated towards fixed expenses. If you live in a high-cost-of-living area (think NYC or San Francisco), this percentage may look more like 60%. Your after-tax monthly income is essentially what is deposited into your bank account after taxes and deductions each month while you are working.

Auditing your fixed expenses

Because fixed expenses are well, fixed, you might think that you don’t have as much control over them. However, it’s essential to monitor various aspects of your fixed expenses to maintain financial stability and make informed decisions.

Here are some strategies to help you reduce or adjust these expenses:

• Refinance loans: Lower interest rates can reduce mortgage, auto, or student loan payments.
• Review insurance: Shop periodically for coverage that meets your needs at the best price.
• Negotiate contracts: Call your phone, cable, or internet provider for better rates or switch to cheaper plans.
• Trim housing costs: Downsizing or relocating can free up significant cash flow.
• Cut utility use: Energy-efficient appliances, smart thermostats, and mindful usage lower bills.
• Rethink transportation: Public transit, carpooling, or selling a second car can reduce ongoing costs.
• Check healthcare options: During open enrollment, compare plans and consider HSAs or high-deductible plans if they fit your situation.
• Be tax-smart: Strategies like Roth conversions or deductible expenses can lower your IRS bill.
• Balance retirement contributions: Keep saving, but if high-interest debt or urgent needs exist, adjust temporarily.
• Transportation: Consider public transportation, carpooling, or ridesharing as alternatives to owning a car, which can save on fuel, maintenance, and insurance costs.
• Retirement Contributions: While it’s important to save for retirement, adjust your contributions if necessary, especially if you have high-interest debt or other immediate financial concerns.

2. Variable Expenses

Variable expenses are the costs that change from month to month. Unlike fixed expenses, these are often discretionary and within your control — which is why they can make or break your budget. Groceries, dining out, gas, clothing, personal care, hobbies, and social activities all fall into this category. It’s the area most likely to leave you wondering: “Where did my money go?”

Rule of thumb for variable expenses

Try to keep variable spending within 30% of your monthly take-home pay. For example, if $10,000 lands in your bank account each month, aim to spend no more than $3,000 on variable costs. Many people track this by funneling variable expenses through a single credit card or dedicated account to monitor spending against their target.

Tips for controlling variable spending

Because variable expenses fluctuate, they demand closer attention. A few strategies to stay on track:

• Track actively: Monitor these expenses weekly to spot overspending before it snowballs.
• Make trade-offs: Overspent on dining out this month? Balance by cutting back in clothing or entertainment.
• Try envelope budgeting: Use cash or digital “envelopes” to set category limits — once it’s gone, it’s gone.
• Prioritize joy, not just cost-cutting: Decide which variable expenses add the most value to your life and give them room in your budget, while trimming the rest.

Variable spending is where you have the most flexibility — and the most risk. Being intentional here lets you enjoy what matters most without derailing your bigger financial goals.

3. Infrequent, but Expected Expenses

Even the most carefully built budget can get thrown off by costs that don’t show up every month. Think of things like holiday gifts, vacations, tuition payments, charitable donations, or other occasional expenses that arise only a few times a year.

To avoid cash-flow surprises, plan for them in advance. One simple strategy is to create a “miscellaneous” category in your spending plan dedicated to these non-monthly costs. For example, if you typically spend about $1,500 a year on infrequent expenses, set aside $125 each month. That way, the money is ready when those expenses come due — and your regular budget stays on track.

4. Essential and Discretionary Expenses

It’s helpful — both while you’re working and in retirement — to separate your spending into essentials (needs you can’t avoid) and discretionary items (wants that reflect personal choice). This simple distinction makes it easier to see where your money is going and how much flexibility you really have.

Why It Matters: Labeling expenses as essential or discretionary helps you:

• Prioritize what truly supports your life and long-term goals
• Plan for emergencies without panic
• Reduce unnecessary spending
• Track progress toward savings objectives
• Ease financial stress by knowing which costs are adjustable

In other words, this exercise isn’t about restriction — it’s about clarity and control.

These Categories Can Shift Over Time

What feels discretionary now may become essential later, and vice versa. For example, while working, multiple streaming subscriptions may feel like luxuries. But in early retirement, with more free time, you may value them as an important source of enjoyment. Life stage, health, and circumstances all shape how you define needs versus wants.

In tough markets or during a job loss, being able to quickly identify and trim discretionary spending can make financial setbacks much easier to navigate.

Rules of Thumb for Discretionary Expenses

There are a couple of common guidelines for balancing essentials, wants, and savings:

• 50/30/20 rule: 50% to essentials, 30% to discretionary spending, 20% to savings.
• 70/20/10 rule: 70% to essentials, 20% to savings, 10% to discretionary spending.

Neither rule is one-size-fits-all, but both give you a framework for aligning your money with your priorities.

5. Expenses Unique to Your Personal Financial Situation 

Beyond everyday personal spending, you may also face expenses tied to unique circumstances — for example, costs related to a rental property.

Rental Property Expenses

Owning a rental comes with its own set of recurring and occasional costs, including mortgage payments, property taxes, insurance, utilities, property management fees, maintenance, and repairs. Just like personal expenses, you can sort these into fixed (e.g., mortgage, taxes, insurance) and variable (e.g., repairs, utilities, maintenance).

Operating vs. Capital Expenses

It’s also important to distinguish between:

• Operating expenses — the ongoing costs required to keep the property running, like insurance, utilities, and routine maintenance.
• Capital expenses — bigger, less frequent investments that extend the property’s life or improve its value, like a new roof, HVAC system, or major renovation.

Recognizing these categories helps you budget more accurately, anticipate cash needs, and make informed decisions about whether to hold, sell, or reinvest in the property.

Why Auditing Your Spending Matters

Regularly reviewing your expenses can be eye-opening. Patterns emerge: you might already suspect your dining-out costs are high, but seeing the actual numbers still makes you wince. Other categories may surprise you — like gas or utilities quietly eating away at your budget month after month.

Whether you revisit your spending plan quarterly, semiannually, or annually, the point is to check in and course-correct. An audit helps you see if your spending still aligns with your values and goals, and sets you up for long-term financial success.

Small Adjustments, Big Impact

Even modest changes in habits can fine-tune both essential and discretionary expenses, making it easier to reach your goals. And adjustments don’t always mean cutting back — sometimes you’ll need to trim during a downturn, but other times you’ll find you can afford to expand your lifestyle after years of disciplined saving and investing.

Assess If Your Income Keeping Up with Inflation

Costs for everyday goods and services tend to rise over time — sometimes faster than we expect. That’s why it’s important not only to track what you’re spending, but also to ask whether your income is keeping pace with inflation. If your paycheck, pension, or investment withdrawals aren’t growing at the same rate as your expenses, you may find your money doesn’t stretch as far as it once did. Regular audits help you spot this gap early and make adjustments before it turns into financial strain.

Use the Boldin Retirement Planner to Help You Audit and Plan Your Spending

Gaining a better understanding of your expenses can feel like a daunting task. However, you don’t have to do it alone. 

The Boldin Retirement Planner enables you to model your expenses through the Basic Budgeter. You can reflect how you spend today and you also can model how your spending might change in the future, by adding expenses for different phases of your life.

PlannerPlus subscribers can also take advantage of the Detailed Budgeter with additional features including:

• Planning for essential and discretionary expenses (Must Spend vs. Like to Spend)
• Adding tax treatment to specific expenses
• Varying your spending for different phases of your life in 75+ categories

This powerful tool helps you establish a current and future spending plan, so you can be confident your finances will support you through life’s various phases.