DEFINITION OF CONSUMPTION

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I am using ESPlanner Plus 2.15.6-2. The help manual discusses discretionary spending. I think that this is what earler versions and current reports call Consumption?

Per the help manual, p 32: "Current discretionary spending is calculated as the household’s current total income minus the sum of its current saving, its current special expenditures, its current taxes,its current life insurance premiums (assuming your household purchases the amounts of life insurance recommended), and its current housing expenditures."

However, when I reduce Total Income (Main Report, Total Income Tab, Column K) by the sum of Current Saving (Main Report, Current Tab, Column C), Special Expenditures (Main Report, Total Spending Tab, Column E), Taxes (Detail Report, Taxes Tab, Column H), Life Insurance (Main Report, Current Tab, Column C), and Housing Expenditures (Main Report, Total Spending Tab, Column G), I get a value that is wildly different (21% higher) than the value computed by ESP (Main Report, Current Tab, Column C).

What am I doing wrong?

Chuck

‹ Transferring Data Files between Computers Assets table was updated ›
Submitted by r65lser on 25 January 2010 - 6:35pm.
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Comments

1
From: Laurence Kotlikoff

Chuck, Please call me at 617 834-2148. You are using, I believe, total life insurance holdings, not life insurance premiums. That's your mistake, I think. But we'll find out once we're on the phone. best, Larry

2010-01-31 10:37
2
From: Dan Royer

It sounds like you want to start with Total Income. If you do that, take Total Income - Taxes - Saving and you'll get a number. Then, from that number, subtract everything in your total spending report for that year except the consumption number. The result will be consumption or discretionary spending.

2010-01-31 10:42
3
From: r65lser

Dan,

TNX for your help - that worked perfectly. I was then able to modify our personal budget to accomplish ESP's recommended savings increase / consumption decrease.

I wonder if I am the only person who could not figure this out - maybe the help document could include this equation?

Chuck

2010-02-01 12:43