Cash Out Flow (Expense/Spending)

Generally, we pay out money because we want to buy an asset or incur some expense. Regardless of whether you pay for an expense or an asset, it is still a cash out flow.
This is how to differentiate an expense from an asset.
Any payment in exchange for a benefit that you can enjoy now is an expense. Example: Buying a DVD, food, clothes.
Any payment in exchange for a benefit that you can enjoy in the future is an asset. Example: Education fund, retirement fund.
Any payment in exchange for a benefit that you can enjoy now and the future plus you can reasonably sell it in a secondary market is an asset. Example: House, stocks, car, painting.
An exception is your mortgage payment. Mortgage payments are made up of 2 parts. The first part is the interest and the second part is your loan. Paying the interest portion is an expense while the paying the loan portion is building up your asset base
Tax: Remember to include periodic expenses such as property taxes, auto insurance, membership fee and so on. Do not let these expenses catch you off guard. You should examine credit card slips, check butts and bank statements for the past 1 to flag out these expenses.

Energy and Utilities: Look at your bills for the past 1 year and average out the monthly expense. This is because utilities expense is affected by seasonal factors. When the weather is cold, you will turn up your thermostat and rack up your utility bill. The monthly average will provide a more reliable estimate of your expense. Do pay attention to other types of expenses which are seasonal.

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