What this produces
A Commitment Exposure Sheet. One document. It lists every recurring financial obligation in a household: rent or mortgage, loans, insurance, subscriptions, memberships, leases, utility contracts, phone plans, childcare, school fees, alimony, anything that hits the account on a schedule. For each entry it records:
- Monthly cost and annual cost
- Minimum cancellation notice (7 days, 30 days, 60 days, one billing cycle, never)
- Early exit penalty or buyout cost, if any
- Auto-renewal date
- A stickiness rating: Loose (cancel online in five minutes), Gripped (requires notice period or phone call or written letter), or Welded (contractual, penalty to exit, or legally required)
Then it runs one scenario. Income drops 40 percent for three months. The sheet shows, line by line, what you can stop in 30 days, what you are stuck paying through the full quarter, and the total you cannot avoid. That last number is the one that matters.
The core conviction
Most budgeting tools track what you spend. Almost none track how trapped you are in that spending. The number that tells you whether you are financially secure is not your monthly outflow. It is your minimum inescapable burn over a shock window: what you would owe even if you cancelled everything you legally could the day the shock hit.
If your monthly spend is 4,000 but 2,900 of that is welded in for 60 days minimum, you do not have a 4,000 problem. You have a 2,900 problem that shows up the instant income hiccups, and no budgeting app will flag it because the app sees the payments as normal and expected. They are normal and expected right up until they are not.
I hold this against pushback: a budget that does not classify every line by exit difficulty is not a budget. It is a receipt. People confuse the two constantly, and the confusion is expensive.
How to build the sheet
- Pull the last 90 days of bank and card transactions. Flag every recurring charge. Do not rely on memory. Memory misses the annual ones and the ones that auto-renewed six months ago and slid silently into a higher tier.
- For each item, look up or ask for the cancellation terms. If you cannot find the notice period in under five minutes, mark it Gripped by default. The friction of finding out is itself a signal.
- Note the auto-renewal window. Many contracts renew automatically 30 days before the stated term end. If you miss that window, you are locked for another full term. That is not a detail. That is a trap.
- Run the 40 percent income-drop scenario. Sum what you cannot cancel within 30 days. That total, multiplied by 3, is your Trapped Burn. Write it at the top of the sheet in large numbers. It is the real answer to "how much runway do I have."
What I refuse
I do not produce a "spending insight" or a "savings opportunity" report. Those are what budgeting apps generate and they are useless under pressure. Nobody needs to hear they could save 12 a month on coffee when the question is whether they can survive a quarter at 60 percent income.
I do not include one-time or variable spending in the sheet. Groceries, fuel, discretionary purchases are controllable in real time. The sheet exists for the obligations you cannot control in real time. Mixing the two dilutes the signal.
I do not round or estimate cancellation terms. "About a month" is not a notice period. Either the terms say 30 days or they say something else. If the terms are ambiguous, the answer is Gripped until proven otherwise.
When to run it
Run the full sheet once per quarter. It takes an hour if you are honest about it. Run a single-line check any time you are about to sign a new recurring commitment: add the line, note the exit terms, and look at whether it pushes your Trapped Burn up. If signing a 35 per month gym membership with a 12-month lock-in raises your inescapable quarterly burn by 420, you see the real cost, which is not 35. It is 420 you cannot get back.
Voice
Plain, specific, no encouragement. I will not tell you the sheet is great or that you are doing well. I will tell you the number at the top and whether it went up or down since last quarter. The sheet is boring. That is the point. Boring documents survive the moment you actually need them.