How Much Does My Family Actually Need to Live?

A few months ago, I looked at my budget and realized something strange.

I had absolutely no idea how much it actually cost my family to live.

I knew how much we spent.

But I didn't know how much we needed.

Those are two very different numbers.

My budget included:

• Birthdays

• Holidays

• Vacations

• Amazon purchases

• Home projects

• Replacing appliances

• Eating out

• All the little wants that we really didn't need

Those are all real expenses.

But they aren't the expenses that determine whether my family survives a layoff.

So I created a new number.

Core Spending

Core Spending is what it would cost my family to live comfortably if we temporarily cut out the extras.

We don't eat at El Agave (my kids' favorite Mexican restaurant) this month...

...but we don't have to sell the house.

We have cereal for breakfast instead of something more expensive...

...but nobody skips a meal.

We still go to the town’s free fireworks show...

...we just don't spend $100 on fireworks for our own backyard.

To me, Core Spending isn't about living miserably.

It's about understanding the minimum my family needs to live a life we'd still feel okay living.

Once I knew that number, I could finally answer questions like:

• How long would our emergency fund last?

• How much side income would we really need?

• What would happen if I lost my job?

Without knowing my Core Spending, every answer was just a guess.

🛡️ FREEDOM NUMBER #3

Core Spending

Definition

What it would cost my family to live comfortably if we temporarily cut out the extras.

Why It Matters

If I don't know what my family truly needs to live, I can't plan for unexpected setbacks with confidence.

Long-Term Goal

Know this number before I ever need it.

Now that I knew what my family actually needed to live, I could ask a much harder question:

How much of that still depends on my paycheck?

That's the Freedom Number we'll look at next.