We categorize things under 'essential' and 'everything else'. Essential includes food and shelter (both of which are somewhat modifiable as well). Everything else is icing on the cake . . . cutting expenses becomes easier when you realize that more than 80% of your spending is not essential.
Hah. I love that as a concept.
The problem with it is picturing how to implement it. Almost all of my spending now (traveling, without a home base) is: what counts as essential?
And then do I have to split up expenses to allocate them partially?
Like, the lodging I'm staying in.. I need a place to stay, so is it essential? I could find a cheaper place. So is the minimum amount I could spend the essential part, and the rest not essential?
What about a plane ticket to go to the next place? That's essential to this lifestyle, but not essential to living itself.
How about food? Is only grocery store essential, but eating out is not? What about when eating out is as cheap, or cheaper, than groceries, so it's done half the time? Then the grocery budget, labeled essential, appears smaller than it should.
Health insurance, I assume, is essential? But what about gasoline?
It seems harder to me, to categorize things as essential or not, versus one of 5-6 basic categories.
Since I've been traveling, where everything is cash (and I hate cash, at home I used CCs 99% of the time, and autotracked with Mint), I've had to manually track.
The categories I've used, in the last 4.5 months are (in order of most to least frequent):
Groceries
Eating Out
Transportation
Entertainment
Lodging
Shopping
Charity
Medical
The top 4 are 90% of my use, and the top 2 probably 80%. Once you've paid for a place to stay, what do you need besides some food? Then you just go exploring. That's free. :)