Money Clarity

How to know what next month will actually cost

Add up every charge that appeared in all three of your last statements. That number is your committed cost - it will happen next month whether or not you plan for it. Most people are surprised by how large it is, because it includes items they think of as occasional but that are in fact monthly.

Committed cost is not the same as your budget

A budget is what you intend to spend. Committed cost is what will leave your account regardless. The gap between the two is the reason careful people still run short.

Committed: EMIs, rent, insurance premiums, SIPs, subscriptions, school fees, mandates
Discretionary: food, travel, shopping, entertainment
Only the second group responds to willpower; the first responds only to decisions made in advance
Income minus committed cost is your real spending money - and it is the only number worth budgeting against

The items that break most forecasts

Certain costs are predictable but irregular, which makes them feel like surprises even though they are on a schedule.

Credit card bills - the amount varies but the due date does not, and the bill reflects spending from up to 50 days earlier
Annual subscriptions and insurance premiums, which land in the same month every year
Quarterly or half-yearly school fees
Festival months - Diwali and wedding season reliably run above baseline
Loan EMI resets on floating-rate products when the benchmark moves

A forecast you can build in twenty minutes

This is deliberately simple. Complexity is why people stop.

List every charge that appeared in all 3 of your last statements, with amounts - that is your monthly committed base
Add anything due next month that is not monthly: annual premiums, fees, known one-offs
Add your expected credit card bill, which you can already see accumulating in the current cycle
Subtract the total from your take-home pay. What remains is genuinely spendable
If that number is negative before the month starts, no amount of careful spending fixes it - the fix is on the committed side

When the number comes out negative

A negative result is information, not a verdict. It means the committed side needs work, and there are usually three levers.

Reduce the largest committed item - for most households with debt, that is loan interest, not lifestyle
Remove recurring charges that no longer earn their place
Move a high-interest balance to a cheaper product, which lowers the EMI without changing anything you do
Only after those three does cutting discretionary spending become the efficient move

Common questions

How far ahead can I realistically predict my expenses?

One month with high confidence, three months roughly. Committed costs - EMIs, rent, subscriptions, premiums - are known well in advance. Discretionary spending is where forecasts fail, which is why the useful number is income minus committed cost rather than a full budget.

Why is my credit card bill always a surprise?

Because it reflects spending from up to 50 days earlier, depending on where in the billing cycle a purchase falls. The bill you pay in October largely reflects September behaviour. Checking the accumulating statement mid-cycle removes most of the surprise.

Forecasting is not a discipline problem, it is an arithmetic one. Work out what is already committed before the month starts, and the rest of the month stops being a surprise.

Written by Danish Mirza, founder of Unyfy. 14 years in Indian lending and collections at Standard Chartered, Barclays, Ola Money and Uni Cards.
Last reviewed 2026-09-08.