Tax season is the perfect time of year to figure out how much money you spend. Okay, so maybe this is not exactly a budget per se. But this quick and dirty budget does tell you how much you spend, which is what most people want to know when they’re approaching retirement. How does it work?

Here are the steps:

  1. Grab your 1040
  2. Scroll down to Total Income (line 9 in 2022)*
  3. Add that number to your calculator.
  4. Scroll down to Total Tax (line 16 in 2022).
  5. Subtract that number.
  6. Find your State Tax return and Local return if any. In Michigan, that’s line 24 of MI 1040.
  7. Subtract total State and Local tax.
  8. Boom! That’s how much you spend.
  9. Divide that by 12 and you have your monthly budget.

Budgets don’t have to be complicated. You really just want to know how much you are spending. That’s it.

There are a couple of caveats:

  • * You could subtract dividends and interest and capital gains from your total income if you don’t spend those. I usually subtract them.
  • If you’re saving pre-tax money in an HSA or retirement plan at work and you want to show that in a detailed budget, you have to add that to your total income.


Knowing how much you spend doesn’t have to be complicated. Once you take your total income and back out taxes, that’s your after-tax income. If your debt is increasing, you’re spending more than you make. The key is to live within that after-tax income amount .

To lower your expenses, I suggest you start with the two biggest budget culprits: your home and auto. For help with your home, check out Mortgage Habits of Millionaires. For help with autos check out Avoiding Blackhole Car Habits. Further reading includes:

— Originally published on: Feb 21, 2019. —

Rich Feight, CFP
Rich Feight, CFP

Hi, I'm Rich Feight I'm a fee-only Certified Financial Planner, successful business owner, and self-made millionaire that knows how to beat the system and become wealthy. I have a lot of clients that have done it too. I'm also pretty good at finding that ever-elusive work/life balance so many of us strive for. Lucky for you I have an abundant mindset and give all my knowledge away on my blog. So if you want to know what it takes to become a millionaire, follow me.