To calculate monthly living expenses, you need to properly consider and evaluate the types of costs you pay each month. You should typically begin with the price of maintaining your home, which can include rent or mortgage payments as well as the costs of utilities like electricity and phone service. Once you consider these amounts, then you should also calculate additional monthly living expenses that are necessities, such as car payments, insurance, repayment of debt, and food. Finally, consider any miscellaneous expenses you have, which may include expected costs for clothing, charitable donations, and entertainment costs.
Monthly living expenses are typically those costs that you need to be able to pay each month in order to survive and maintain your standard of living. To determine what you need to be able to pay, you should begin with the most important necessities, which are often the cost to keep a roof over your head. If you have a house, then you need to consider mortgage payments you may have, as well as costs for utilities like electricity, heat, water, sanitation, and phone or cable service. Monthly living expenses for a rental unit usually includes rent rather than a mortgage, and might not include all of the utilities, though this depends on different rental properties.
You should also consider secondary monthly living expenses that you might have, which are still required for survival. Food, for example, can often cost more than utilities over the course of a month. You should typically focus first on food expenses from groceries that you can use to make meals.
In additional to the cost of food, also add together other monthly living expenses that are necessary but not innately tied to your survival. This means that costs for insurance and car payments should be considered and added to your other expenses. You should also consider any debts you may have, such as student loans or credit card payments, which need to be paid each month for you to remain functional.
Once you have considered these necessary monthly living expenses, add in any costs that are not essential to your survival, but which are realistic aspects of your budget. If you want to be able to go out to eat at restaurants or go to bars and clubs, you should consider the cost of doing so on a regular basis. These considerations and other forms of entertainment and recreation should be added to your other monthly living expenses. You might include costs for new clothes on a fairly regular basis, and consider how much you want to be able to put aside in savings or for investments each month.