How much can you spend per day?

Your daily spending rate is a very useful number. If you're wondering how much you can regularly spend, without derailing your financial plan, here is how to back into that number:

  1. Start with pretax income

  2. Multiply it by 20% - this is the amount you should be saving

  3. Estimate your taxes on a website like SmartAsset

  4. Subtract out all your fixed, necessary expenses, or other expenses you can't live without

  5. Divide by 365

Here is an example to help:

Jimmy and Kim make $400k. They own a $1.5M home with a $1M mortgage balance. They send their kids to private school. They spend $300/week on groceries. They have other fixed necessary expenses that tally up to $1k/month.

  • $400k income

  • minus $80k savings

  • minus $85k taxes

  • minus $125k in home expenses

  • minus $15,600 in groceries

  • minus $60k in private school

  • minus $6,000 in additional necessary expenses

  • equals $28,400 leftover per year

  • divided by 365

  • $77 per day of spending

Ways to make this equation useful to you:

  • Add in other expenses that you want to have to hone in on a better daily spending number

    • For example, Jimmy and Kim want to spend $100/month on subscription services and $10k/year on vacations

    • This reduces their daily spending to $47/day

  • Knowing your "daily spend" will make it easier to evaluate how much you can spend on unplanned, discretionary items

  • If you're married, divide your "daily spend" in half

Please reach out if you would like help calculating your daily spending rate!

Personal Financial Pla...Morgen Rochard