Adding and Managing Expenditure

The ExpenditureModal is used to record a household's expenses. A detailed understanding of expenditure is crucial for creating an accurate cashflow analysis and a realistic financial plan.

Accessing the Expenditure Modal

From the Household Overview page, you can find the "Income & Expenses" section. Clicking the "Add Expense" button will open the modal. You can also edit an existing expense entry by clicking the pencil icon next to it.

Inputs

• Name: A descriptive name for the expense (e.g., "Groceries", "Rent", "Car Insurance").
• Amount: The monetary value of the expense.
• Frequency: How often the expense occurs (Weekly, Fortnightly, Monthly, Quarterly, Annually). The system will automatically annualize the amount for calculations.
• Category: The type of expense.
  • Fixed: Expenses that are consistent and predictable (e.g., rent, mortgage payments).
  • Variable: Expenses that can change from month to month (e.g., groceries, utilities).
  • Lifestyle: Discretionary spending (e.g., entertainment, holidays).
• Details: Any additional notes or details about the expense.

How It Works

All recorded expenses are totaled to calculate the household's overall expenditure. When you use the "Create Scenario Automatically" feature, this total is used to populate the annual_expenses1 and annual_expenses2 fields in the financial plan, representing pre-retirement and post-retirement spending.

Annualization of Expenses

The system automatically converts all expense frequencies to an annual amount to ensure consistency in the financial models.

Formula:

• Weekly: Amount * 52
• Fortnightly: Amount * 26
• Monthly: Amount * 12
• Quarterly: Amount * 4
• Annually: Amount

This annualized figure provides the baseline for the household's expenditure in the financial scenarios.