Input all of your current monthly expenses. If something doesn't fit in the pre-defined categories, add it into the "miscellaneous" total or add a new expense entry if you think it’s worth to see separately. This is a good snapshot of your outgoing cash-flow.
Subtract all non-essentials that are no longer used or used infrequently. Eliminate all things that consume income or attention without enriching your life (subscriptions to magazines you don't read, memberships to services you don't use, seldom-driven but often-serviced cars, etc.). This new end total, multiplied by 1.3 (or your customized buffer/expense multiplier) to provide a 30% (or customized percent) buffer, is the clean slate that we take to the next step adding in all the elements and luxuries that define your ideal lifestyle.
Once you begin taking mini-retirements, many of these expenses can be replaced by cheaper expenses overseas, whether for one month or 24 months. I [Tim Ferriss] saved more than $32,000 by traveling through 20 countries for 15 months as compared to just sitting at home in northern California. Extended travel or relocation to dream locations is actually a popular Lifestyle Design tactic for increasing savings.
Whenever possible, look at credit card statements and put the expenses in other categories, as "credit cards" is too vague to be useful. This calculator should be used to determine exactly where you're spending income.