One good reason to use hledger or similar program is to make progress towards a better future. Part of planning for a better future is prepare in advance for emergencies. The unexpected happens, and the better prepared you are for the storms in life when they hit, the better your future will be. As mentioned last week, I am thinking about this after having recently read the book 31 Days to Emergency Preparedness and Personal Resilience.
One chapter of this book mentions the value of having an emergency fund. Specifically, the advice is that you should have in your savings 3 to 6 months of living expenses.
How can hledger help with this? Here, the incomestatement command seems very useful, as it gives a total of both your income and expenses. In my case, I ran the report over the 2025 period using the command
hledger incomestatement -p 2025
I then divided the total expenses by 2 to get a figure for 6 months of expenses.
How realistic is that number? In my case, I noticed that the total expenses included federal and state taxes. However, if there were an emergency such that there was no taxable income, my federal and state tax expenses would be zero for that period. Therefore, I could reduce my living expenses according to the decrease in taxes that I would have.
It also occurred to me that certain other expenses could be eliminated if my income disappeared and I were living off savings. For example, I could be cut back or eliminate expenses related to eating out, charitable giving, and certain subscriptions.
The big caveat, however, in planning for such cutbacks is that it is one thing to say that you are going to do deprive yourself of something that your are currently enjoying and another thing to actually do it when the time comes.
Take eating out, for example. How easy would it be to eliminate eating out? Well, try avoiding restaurant visits or ordering take out meals for two months as a test. If you find yourself making exceptions and dining out during this time, then how realistic is it that you won’t find yourself making the same exceptions when you are living off your savings? You want to know, because a realistic plan is better than one made on assumptions that won’t prove true.
In short, I found the hledger incomestatement command a good starting point for estimating your living expenses. And the expense categories that it lists will help you identify possible expenses you could avoid in an emergency situation. If your savings can cover your living expenses for 3 to 6 months, you are in a much better position to weather financial storms.