How Do I Figure Out What My Monthly Expenses Are?

by Peter Orville, Binghamton Bankruptcy Lawyer

March 23, 2008

Before you sign your bankruptcy petition, you must review all of the schedules for accuracy. One of the schedules, called “Schedule J – Current Expenditures of Individual Debtor(s)” is where your monthly expenses are listed. If there is one place on the bankruptcy petition that my clients consistently get wrong, it is on “Schedule J”.

Very few people truly know what they spend each month. For example, how much do you spend on food per month? You are probably guessing low. Start with your big shopping, then add in all of the little shopping trips during the week (bread, eggs, milk), then add in your expenses for lunch, snacks during the day, coffee and soda breaks, school lunches for the kids, and eating out. I’ll bet your total is more than you thought!

Some expenses are easy to figure. Those include your monthly fixed expenses for those things you pay the same for each month. These include mortgage or rent payments, car payments, car or health insurance, child support, cable (unless you sometimes use “pay-per-view”).

Next are the monthly variable expenses. These are for those items that you pay monthly, but the amount you pay can be different each month. These items include food, electric costs, phone, day care, and gasoline. To figure these amounts, go back over the past year to see how much you spent on each item, and then divide by 12. This will be easier for some items (utilities, for example, where you can just go back into your check register to see what you paid) and harder for others (gasoline, unless you always put it on a credit or debit card).

Then you have periodic expenses. These occur on a regular basis, but not monthly. Examples include insurance, taxes, clothing, and medical expenses. Try to calculate what you spend in a year for each of these expenses, then divide by 12.

The last category is discretionary expenses. These include gifts, vacations, entertainment, subscriptions and charitable giving. Do your best to figure how much per year you spend on these items, and divide by 12.

Your bankruptcy attorney will not know what you actually spend on your monthly expenses, but he or she can probably help you sort it out so your “schedule J” is as accurate as possible.

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Peter Orville is a bankruptcy lawyer in Binghamton, located in the Southern Tier of New York. He is a member and New York co-chair of the National Association of Consumer Bankruptcy Attorneys.

Last modified: January 4, 2013