Should you adjust your expenses?
For long-term planning you don't track small variations in living expenses. But life changes can mean permanent adjustments to yearly expenses.

For example, if your spouse dies, your average annual expenses will probably drop. To adjust your future expenses, you can guess that your annual expenses will drop by 20%.

Other events that can cause a permanent shift in annual expenses (instead of a one-year change) are things like retirement, and the birth of a child. You can think of these events as triggering a "change of state."

What about college?
Although your overall expenses will probably increase when your children go to college, those costs are accounted for Next. However, if your child doesn't live at home while attending college, you may want to adjust your living expenses lower at that point.

 Adjustments to living expenses Edit