Monthly Essential Expenses

Monthly essential expenses are the level of monthly income necessary to cover all basic needs in a household's budget. You can think of this as the income required to cover non-discretionary spending or as the level of income required for this household to avoid making major reductions in core basic living expenses, such as housing, transportation, or food.

When developing plans, you will be able to compare the income provided under a given plan to this essential level and to plan for how this household would react if its financial circumstances ever worsened to the point that this level were reached.

Planners can either estimate monthly essential expenses as a single number or develop a household budget and set the plan's monthly essential expenses level from this budget. (Budget items include a field in which you may specify how much of a given budget item is "essential". For example, groceries are essential, but maybe filet mignon is not!)