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2013 expenses
Old 12-29-2013, 06:43 AM   #121
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2013 expenses

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Originally Posted by W2R View Post
No, thought about it but was just having too much fun here! So, I chose to stay in New Orleans this year. If I had taken a vacation, most of it such as airfare and hotel costs would have gone in Misc. or maybe a new "Vacation" category. But still, the food would have gone into Restaurants, and gas into Gasoline, vacation clothing into Clothing, and so on.

My Vacation category is my largest one apart from income taxes and includes spending on food, gas and purchases while on vacation. Starting ER I estimated I would spend $10,000 on vacations, and then I cut expected spending back to $8,000. In the end I spent more than $10,000 on Vacations and likely will again in 2014. ⛽️🎡✈️🚘🚛🎭🇺🇸🇮🇹🌊😱😄
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Old 12-29-2013, 08:00 AM   #122
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To answer the OP's question, my expenses are a bit higher than last year's - about average when compared to the posts above.
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Old 12-29-2013, 08:49 AM   #123
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Originally Posted by Ready View Post
Does anyone include reserve funds in their annual expenses for eventual replacement of big ticket items? For example, if you drive a car approximately 10 years before replacing it, and your car typically costs around $30K, do you include $3K in reserves each year? Or do you just have an extraordinarily high year of expenses in the year you buy the car?

That's the proper way to do it from an accounting standpoint. My normal budget does not include that because I like to see what I truly expect to spend for the up coming year. I do include reserves for maintenance items. But I do project long term spending which includes a big ticket items like new cars and see how that affects my overall w/d rate.

So I guess the answer to your question is yes and no.
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Old 12-29-2013, 09:46 AM   #124
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Like others, I'm reluctant to go into too much detail so I can avoid the bragging thing. We are fortunate to be able to live without a budget. We can do this because of lifelong frugal spending and savings habits.

In 2013, we spent significant funds furnishing and remodeling our AZ winter home. We contributed to 529 plans for the grandkids. With partial Roth conversions each year, our total tax bill including property taxes is over $30k. Medical, mainly insurance related, was around $10k. Food was around $10k.

However, we don't eat out much, my clothing expense was less than $200, I drive a 10 year-old car. So, after SS, our WR is around 2% as it has been in most years since 2001 when we retired.
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Old 12-29-2013, 10:21 AM   #125
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I have a budget however I never figured out what I've spent. This thread prompted me add up my annual projected expenses for 2014 based on my monthly budget. Health insurance will be taken out of my pension check. Do you guys save receipts or log everything spent on a daily basis, what's a good way to track expenses? I'm thinking as long as I stay within budget I'm doing ok. Thanks

$10,284. Mortgage
$11,556. Property Taxes, HOA, house insurance, including flood, car insurance, AARP health care opt
$3780 House/Car maintenance fund & co pays
$10,800. Emergency fund
$1000. Donations
$3,600. Investments
$480. Weight Watchers
$3252. LTC insurance
$300. Pest Control
$752. House Alarm
$1740. TV/Internet/LL
$1704. Electricity
$1920. Water/Sewer/Fire
$600. Gas
$744. Cell
$780. Meds
$1200. Lawn
$600. Monthly House cleaning
$4800. Food, car gas
$1908. Misc
$2600 Vacation
$5760. Car fund
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Old 12-29-2013, 10:40 AM   #126
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Seems realistic except- is the vacation for one as that seems like a very low travel/vacation budget.
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Old 12-29-2013, 10:44 AM   #127
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Quote:
Originally Posted by W2R View Post
No, thought about it but was just having too much fun here! So, I chose to stay in New Orleans this year. If I had taken a vacation, most of it such as airfare and hotel costs would have gone in Misc. or maybe a new "Vacation" category. But still, the food would have gone into Restaurants, and gas into Gasoline, vacation clothing into Clothing, and so on.
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Got it. I'm not retired but in my so called plan I have a line item for vacations thinking early on I'd like to do that. There are times I think I like planning the trips more than actually going

Been to New Orleans so once and the fun meter was pretty high so enjoy!
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Old 12-29-2013, 10:56 AM   #128
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Originally Posted by joeprintz View Post
Seems realistic except- is the vacation for one as that seems like a very low travel/vacation budget.
Yes, this is for one. I'm starting off with $8000 in the vacation bucket already. Most of them are to Las Vegas & Louisiana...rooms comped & airfare to Louisiana comped. My bankroll comes out an already established bucket.
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Old 12-29-2013, 11:35 AM   #129
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Yep, and we buy NO junk food, very little processed and hardly any soda. Lots of fruit and veg, salmon. Hubby can still run a 20 minute 5k at 60, me not so much. He has been doing all the shopping as I was still working, and he buys whatever..and never looks at sales or prices. Wine is our big expense, hate to admit it, but the two of us go thru 5-7 bottles a week, so that's around $100 a week, yikes, but it keeps us happy!
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Old 12-29-2013, 11:38 AM   #130
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Quote:
Originally Posted by Cassie View Post
I have a budget however I never figured out what I've spent. This thread prompted me add up my annual projected expenses for 2014 based on my monthly budget. Health insurance will be taken out of my pension check. Do you guys save receipts or log everything spent on a daily basis, what's a good way to track expenses? I'm thinking as long as I stay within budget I'm doing ok. Thanks
I don't have a budget and do not need/want one right now. Still, I am recording everything I spend out of curiousity. I want to know exactly where every cent of my money is going! Although it may seem a little OCD, for some reason this is my idea of fun.

I log everything I spend in cash on a daily basis, and "balance" my wallet in the evenings so that I know where every penny of my cash from the ATM goes to. I used to just put down "ATM", but now I record everything very specifically, to the penny.

As for the checks, debit card transactions, and automatic bank deductions, etc, I get all that online from my bank account and log it as well. Then I balance my log with my bank account, to make sure I didn't miss anything spent.

I want to know the REALITY of what I actually spent, so I don't spread the costs for big ticket items over years (like one might for a budget) unless that is how I actually paid for them. I don't do any other trickery. If the money was spent, it is recorded and that is that. So, some years (like this year), my spending is much higher than other years.

I record absolutely everything, including income tax payments although I choose not to divulge my income taxes here.
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Old 12-29-2013, 11:40 AM   #131
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Quote:
Originally Posted by Cassie View Post
I have a budget however I never figured out what I've spent. This thread prompted me add up my annual projected expenses for 2014 based on my monthly budget. Health insurance will be taken out of my pension check. Do you guys save receipts or log everything spent on a daily basis, what's a good way to track expenses?

I set up an Excel spreadsheet using one of the budget templates and customized it for my needs. Within each category there are subcategories, e.g within Housing there is property tax, utilities, maintenance, etc. The sub totals for each category are helpful. On the left side of the spreadsheet I added a column for the amount I budget annually for each expense. I have a column for each month. On the right side of the spreadsheet I put a column for cumulative spending for each category (YTD) and another column showing the current variance from expected spending. At the bottom I separate out taxes, investments, debt servicing and personal expenses. I enter data monthly and all calculations are automatic. The data inputs come from purchase receipts, which I collect in a Ziplok bag for the current month, and from credit card and banking records, which I print at the end of the month. I shred all the paper after doing the calculations, unless I need to keep a receipt for tax or warranty purposes. For 2014, I will simply make a copy in a new worksheet and delete the numbers. I will adjust the budget for each category based on experience.
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Old 12-29-2013, 12:09 PM   #132
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Quote:
Originally Posted by Cassie View Post
I have a budget however I never figured out what I've spent. This thread prompted me add up my annual projected expenses for 2014 based on my monthly budget. Health insurance will be taken out of my pension check. Do you guys save receipts or log everything spent on a daily basis, what's a good way to track expenses? I'm thinking as long as I stay within budget I'm doing ok. Thanks
Yes, i log all expenses on almost a daily basis. I use Quicken (there are many other products available) and since virtually 100% of all expenses go through my checking account, it is really easy to track them. I have been lucky enough to not need a budget so far (retired 6 years). I just spend what I want/need to and then see how it all works out in the end. I've averaged ~45K per year since retiring.
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Old 12-29-2013, 12:10 PM   #133
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I don't think anything counts as OCD until it starts interfering with your enjoyment of life and your personal relationships, so you're safe

I started "capturing" our daily expenses after joining the ER forum 5 years ago. Kind of a pain at first, until I saw the benefits. Now it's like a muscle I exercise once a month. Over time, the "MISC" category has gone down, as I resolutely assigned each expense to a category. To be honest, I don't believe in "MISC," and feel I'm being lazy when I use it

Income tax is by far our largest expense, so I definitely record that!

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Quote:
Originally Posted by W2R View Post
I want to know exactly where every cent of my money is going! Although it may seem a little OCD, for some reason this is my idea of fun.

I log everything I spend in cash on a daily basis, and "balance" my wallet in the evenings so that I know where every penny of my cash from the ATM goes to. I used to just put down "ATM", but now I record everything very specifically, to the penny.

I record absolutely everything, including income tax payments
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Old 12-29-2013, 12:21 PM   #134
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I applaud those who can live comfortably spending $20 -$30K a year. I don't know how they do it, but it's totally amazing. In many cases, it's hard to tell if this is done out of necessity (low earnings) or just extreme frugalness. I would hate to start having to hang used paper towels out to dry and buy week old bread and dented cans (as on one of the really cheapskate websites). If you have to, then there is no choice, but I wouldn't do it just to save for the future.

Another area many omit is taxes. We do live in the East in a high cost area. Last year was my first full year of retirement (meaning no salary at all) and our total tax burden, to include federal and state income, real estate and personal property (not including sales tax) is close to $38K. To that sum we add other must spend areas such as mortgage, health care (Medicare for 2 plus FEHB), gas, electricity, etc. We have no car payments and are nearing the end of our 15 year mortgage. W2R and Cassie have a great lists to plug numbers into. I'm just afraid to do it . But I do track all spending. And then ignore it .

And our first year of both of us being retired was a blow out travel year - trips to AU, NZ, several of the South Sea islands and Europe, as well as cross country US travel. And 2014 looks to be about the same. We figure we have about 5 to 7 years of unhindered (both physically and economically) travel, before things catch up with us. Our motto is "Having fun while spending the kid's inheritance. " And, if the market continues (unlikely) as it has been, we will have negative SWRs - as in, our total invested (not counting home) went up about 12% from last Dec 31, even counting all withdrawals. How do you determine SWRs when you have a lot more than you started out with ?

I love reading these posts - happens at least once a year, about this time. Keep them coming. And our wishes for everyone on ER to have a wonderful New Year.
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Old 12-29-2013, 01:09 PM   #135
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Originally Posted by Meadbh View Post
I set up an Excel spreadsheet using one of the budget templates and customized it for my needs. Within each category there are subcategories, e.g within Housing there is property tax, utilities, maintenance, etc. The sub totals for each category are helpful. On the left side of the spreadsheet I added a column for the amount I budget annually for each expense. I have a column for each month. On the right side of the spreadsheet I put a column for cumulative spending for each category (YTD) and another column showing the current variance from expected spending. At the bottom I separate out taxes, investments, debt servicing and personal expenses. I enter data monthly and all calculations are automatic. The data inputs come from purchase receipts, which I collect in a Ziplok bag for the current month, and from credit card and banking records, which I print at the end of the month. I shred all the paper after doing the calculations, unless I need to keep a receipt for tax or warranty purposes. For 2014, I will simply make a copy in a new worksheet and delete the numbers. I will adjust the budget for each category based on experience.
Very similar to our approach. Three main sections 1) income. 2) Expenses the net cash flow ties into our balance sheet each month. Reconciling cash balances and paying the credit cards is called budget day. We actually enjoy it. Always working on the current year plus two more into the future. I work at the summary level while my assistant keeps the sub-ledgers(credit cards).
My accounting background has really come in handy in retirement.
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Old 12-29-2013, 02:00 PM   #136
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To the OP, our expenses are a little higher but we had some non-repeating expenses (most of which we planned for) this year:
- Gifts for 7 high/school college graduations among our kids, nieces and nephews
- Buying a new used car to replace a 13 year old car.
- Additional "vacation" travel due to helping with an ill relative (since they live in Florida we were able to do some fun things as well, so we put the trips in the vacation category).
- Replacing our 18 year old heat pump, and having to dug up and replace a well line..
- Our youngest child starting college.

According to Quicken, these 11 categories accounted for 91% of our expenses: taxes (32%), charity (11%), auto (10%), household (9%), college (6%), groceries (5%), gifts (5%), medical (4%), mortgage (4%) vacation (3%), utilities (3%). Based on anticipated changes our expenses target well for future RE.
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Old 12-29-2013, 02:10 PM   #137
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This last year I recorded money spent each day. I did find it a little OCD. For the coming year I'm going to try it bi-weekly. I'll just throw all receipts into a box and record them then.

I mentioned above that I spent about $30,000. this year, excluding taxes and mortgage. This included such relatively expensive things like my LTC premium, condo association fees, and high out of pocket medical/dental bills. Although I was relatively frugal (ie. careful) I could certainly have made that amount lower by not giving to charity, not buying clothes, not eating out, etc. Sadly, I've gained that "Starbucks latte" effect of needing my daily designer java fix, a bad habit! But so much depends on where you live--I'm in the Midwest and you can live pretty cheaply here. Besides eating out I spend virtually nothing on entertainment and have no expensive hobbies. Plus I mostly walk or bike to work, so I drive less than 2000/miles per year. Just lots of variables in all our stories!
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Old 12-29-2013, 02:40 PM   #138
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I don't have a budget but I do track our income (pensions plus withdrawals from savings), and I do track how much we spend each month. Some categories I do break out so I can see what we spend, such as rent, utilities, taxes and healthcare costs. As long as we are spending well below our means I don't have the desire to track more closely than that. Been there, done that, but I can see why some folks need to track expenses closely and why some folks enjoy tracking their expenses closely.
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Old 12-29-2013, 02:50 PM   #139
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We are at $98,000 this year. That's for two of us, 56 and 52. Retired now for 7 years. This is close to what I expected, no mortgage or loans.

Health insurance cost are close to $15,000. The airplane cost about $20,000, much less than last year when we bought it. We also spent $13,000 on car expenses.

We have been spending between $75,000 and $100,000 per year since we retired. I don't see this changing anytime soon, but we could if needed.
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Old 12-29-2013, 02:55 PM   #140
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I don't have a budget but I do track our income (pensions plus withdrawals from savings), and I do track how much we spend each month. Some categories I do break out so I can see what we spend, such as rent, utilities, taxes and healthcare costs. As long as we are spending well below our means I don't have the desire to track more closely than that. Been there, done that, but I can see why some folks need to track expenses closely and why some folks enjoy tracking their expenses closely.
I started tracking 5 years before I retired and have just kept doing it. I'm much more interested in keeping track of my net worth. As long as it is in good shape the spending is not that big of a deal.
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