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Old 12-29-2013, 02:58 PM   #141
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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.
Exactly
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Old 12-29-2013, 02:59 PM   #142
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Our expenses are pretty high since we live in San Francisco rent and pay high income taxes.

Our gross income was spent as follows in 2013: 35% went to Uncle Sam and California, 41% was saved, and 24% was spent (half went to rent). Compared to 2012, our income is up 11%, our taxes are up 25%, and our spending is down 20%. Since our rent and HI increased this year, most of the decrease in spending comes from discretionary expense cuts. Our discretionary spending is already the lowest since 2004 but that trend will likely continue in 2014. We expect another large rent increase in April and marginally higher taxes in 2014 and that money has to come from spending in order to maintain our savings rate.

47.2% - Housing
9.8% - Groceries
6.4% - Auto (including replacement fund)
5.4% - Utilities
2.5% - Health care
2.0% - L&D insurance
0.5% - Pets
26.2% - Discretionary
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Old 12-29-2013, 03:00 PM   #143
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We track expenses in detail and have for decades - as Quicken allows us to do easily. And our "budget" is based on our typical spending. We set a budget for planning purposes, but nothing is in stone. It doesn't matter if we exceed it as we have "extra" funds set aside for splurges.
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Old 12-29-2013, 03:26 PM   #144
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We haven't really tracked expenses yet, but may in the future. I know how much we earned for the year, and how much we have left...pretty much zero! So that kind of narrows it down, I guess. Once I retire this year (2014) my pension won't be taxed by the state, but wife's will until she decides to join me in retirement (probably 2-3 yrs). What I DO know is that my net retirement income (from pension) will be around $8000 more per year than I currently net while working, due to the fact I'm currently maxing my TSP + catch-up. Once I do retire and begin drawing the extra $8000, wife will increase her 401k contributions until she does retire, which will mean in effect our net will remain the same as it is now. She has no pension so only her 401k, which isn't going to be that much. Fortunately, shortly after she retires, my military retirement will begin, which will replace a good chunk of her former pay. Hopefully until she retires, we won't touch any of our savings portfolio.
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Old 12-29-2013, 03:30 PM   #145
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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.
I agree. Our budget is really more of a forecast than a budget. We always exceed the "budget" which has a fair bit of cushion to start with. Net worth is pretty easy to track just by looking at any number of internet portfolio trackers. I doubt anyone would start tracking expenses in this buoyant market, but I remember in 2008 when we indeed used our "budget" to temporarily reduce expenses.
In any event been doing it for so long it seems normal and at this stage I couldn't stop even if I wanted to. Go figure.
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Old 12-29-2013, 03:31 PM   #146
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Originally Posted by martyb View Post
We haven't really tracked expenses yet, but may in the future. I know how much we earned for the year, and how much we have left...pretty much zero! So that kind of narrows it down, I guess.
Just a wild guess (see my sig line), but I suspect if you subtract taxes and savings from your earnings figure you'll have good idea of what you spent.
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Old 12-29-2013, 04:17 PM   #147
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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.
You never know what causes some people to do it (out of necessity or just extreme frugalness). I noticed my dad who is almost 80 sawing his paper towels in half to economize. Then when I was painting his house in the kitchen pantry I pulled out a 2 year supply of canned food. His response was you can't afford to buy food except when it is on sale. So then I really start thinking and ask if he is having money problems. He saved yes they can't save like they used. Down to saving only $1000 a month. Oh and did I mention he has 1 million in assets, paid off vehicles and house, and lives only on pension and SS, and started complaining about forced 401k withdrawals that he doesn't need... He isn't going to change so I'm not going to bother. But I do know he will never run out of money no matter what is going on in his head.
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Old 12-29-2013, 04:29 PM   #148
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I am single, no kids, live in NYC. In my 2 full years of retirement I have yet to spend as much in 1 year as any year I was working. In 2013 I will come in almost 10% under budget. Here is the tally with two days left to go:

MEDICAL/DENTAL INSURANCE (COBRA) 3,600.
MEDICAL/DENTAL EXPENSES 2,493
CONDO MAINTENANCE/TAXES 6,918
INSURANCE HOME/UMBRELLA 1,087.
AUTO/TRANSPORTATION 3,993.
CLOTHING 625.
GYM 785.
GIFTS 1,048.
GROCERIES 4,060.
LAUNDRY 175.
CABLE 690.
GAS & ELEC 492.
PHONE 1,135.
ENTERTAINMENT/MISC 3,909.
TRAVEL 10,957.
INCOME TAXES 3,768.

TOTAL $45,635.

Looking ahead to 2014 I am planning to spend less on medical insurance and transportation - and much more on travel.
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Old 12-29-2013, 05:05 PM   #149
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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.
I don't hang used paper towels out to dry or anything else like that. I live in a high-cost area (Long Island, NY) and my annual expenses for 2013 are just under $19,000. I am single with no kids and no debts. I live in a studio apartment in a large co-op complex which is run very well (maintenance has gone down from 2012 to 2014) and have lived here for nearly 25 years. I own a 6-year-old car which replaced one I had owned for 15 years and averaged about 3,100 miles per year (so my current one should last me at least 10 more years).

I have local, low-cost hobbies including volunteer work and I don't like to travel after all those working years with an awful commute burnt me out from travel.

My expenses will rise a bit in 2014 because I will be switching from a cheap, non-compliant HI plan I never really wanted to a broader one (Silver) I do want. That will add about $1,500 to my expenses, hardly a dent to my finances but will give me more peace of mind.

In my ER preparation, I had always predicted annual expenses in the $18k-$22k range, and that was in 2008 before Obama won and the ACA became a reality.
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Old 12-29-2013, 05:05 PM   #150
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I keep track of spending in a simple Google Documents spreadsheet. My spreadsheet has just 3 columns - Groceries, Gas and Other. I use Google Documents so that DH has access to it from his computer. He has not looked at any of it for over 4 years. I keep track just with receipts, if DH has bought something he leaves the receipt on my desk and I record it in the spreadsheet.

All other categories are fixed amounts paid monthly automatically or one payment that may vary (city utility bill) so I don't need to keep track of ongoing spending in those categories.

At the end of the month I put it all (fixed monthly expenses and the Groceries/Gas/Other totals) together in one spreadsheet along with income and savings. This one just looks like a list with income at the top and totals for the bills and spent categories subtracted. Very easy. I keep a template for this and just plug in the amounts for the month.

I'm the type that ENJOYS doing all this, I know many people think of it as a chore or "work".

I like getting to the end of the month and seeing that income exceeded expenses and that we've saved something for the next rainy day.
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Old 12-29-2013, 07:10 PM   #151
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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
I actually enjoy budgeting and tracking spending. I'm one of those people that if I didn't do that I could spend way too much money.

The best for budgeting is a program called You Need A Budget.

Personal Budget Software - Finance Software for Windows & Mac

There really isn't a way to use it without tracking your spending. Basically you budget each month based upon what you have in hand right then. You can certainly plan for the future but the budget is based upon what you have (no, that doesn't mean you have to spend every penny. You can budget money to categories that won't be spent for months - or years).

If you don't track your spending how do you know if you met your budget and, how, you might want to change that budget going forward. I periodically go through the budget and compare it to the spending and adjust as necessary. I used to perennially under-budget groceries. It was more wishful thinking than reality. So, now I budget more realistically. Conversely, if I have a category that I over-budget to then I can adjust that one down.

Also, looking at spending in comparison to the budget categories can give me good ideas for where I might be able to cut the budget without negatively impacted my lifestyle.
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Old 12-29-2013, 07:44 PM   #152
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I keep track of spending in a simple Google Documents spreadsheet. My spreadsheet has just 3 columns - Groceries, Gas and Other. I use Google Documents so that DH has access to it from his computer. He has not looked at any of it for over 4 years. I keep track just with receipts, if DH has bought something he leaves the receipt on my desk and I record it in the spreadsheet.

All other categories are fixed amounts paid monthly automatically or one payment that may vary (city utility bill) so I don't need to keep track of ongoing spending in those categories.

At the end of the month I put it all (fixed monthly expenses and the Groceries/Gas/Other totals) together in one spreadsheet along with income and savings. This one just looks like a list with income at the top and totals for the bills and spent categories subtracted. Very easy. I keep a template for this and just plug in the amounts for the month.

I'm the type that ENJOYS doing all this, I know many people think of it as a chore or "work".

I like getting to the end of the month and seeing that income exceeded expenses and that we've saved something for the next rainy day.
I used to enter the transactions for myself and DW, but, unlike you, did find that it was a chore.

About a dozen years ago I "transferred budget responsibility" to the DW for groceries, girly stuff, kid stuff, etc. That meant I transferred enough to cover that budget every month. She actually tracks that spending in a separate copy of the budgeting software (good thing too, since that's like 40% of our spend). I haven't pulled her stuff and merged it in 6 or 8 years, though, hehe.
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Old 12-29-2013, 08:05 PM   #153
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Just a wild guess (see my sig line), but I suspect if you subtract taxes and savings from your earnings figure you'll have good idea of what you spent.

I already know what we spent........all of it!!!

I'm strictly speaking about net income...after taxes, health & dental insurance, all retirement account (pre-tax) contributions, life insurance. I'm figuring that if we're making it on current net income, and net income post retirement is at least the same or more...then it's a lock! Right? Seems pretty scientific to me.
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Old 12-29-2013, 08:59 PM   #154
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Also, looking at spending in comparison to the budget categories can give me good ideas for where I might be able to cut the budget without negatively impacted my lifestyle.
This is pretty much my hobby. I got excited when I found out I could buy taco seasoning and gravy mix in bulk at Costco, instead of paying more for the individual packs.

I keep a list of all the expenses we have lowered since DH wanted to retire early. It is a bit scary how many expenses we have cut that we never really needed or don't miss at all.
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Old 12-30-2013, 04:59 PM   #155
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I tracked my expenses for the first time this year for a total of $63K not including taxes, SS and Medicare payments, and savings:

Mortgage/Taxes & Insurance/Utilities: $25K or 39%
House Maintenance, Cleaning, & Lawn Care: $6600 or 10.4%
Groceries and Dining Out: $6300 or 10%
Car Insurance, Gas, Repairs: $3300 or 5.3%
General Health, Drugs, Co-payments, Health Insurance: $6500 or 10.2%
Vacations: $3500 or 5.6%
Clothing: $2600 or 4%
Toiletries, Haircuts, Manicures: $2200 or 3.5%
Gifts & Charity: $2800 or 4.5%
Pets: $2500 or 4%
Misc. Household Expenses: $1900 or 3%

The health category included a fairly expensive exercise bike and the old cats cost me $1400 in medical bills. I have one more house payment so mortgage costs will decrease significantly next year. Items that I hope will decrease in retirement will be utilities, house cleaning, and lawn care when I downsize and have time to do my own housework. I like shopping for clothes so don't see that category as decreasing.
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Old 12-30-2013, 05:20 PM   #156
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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.
I have been using Quicken to keep track of expenses for 3 years. Prior to that, I only paid attention to portfolio total, not even net worth. However, with no earned income now, I want to be sure that I stay around 3.5% WR.

With the market doing so well this year, I can see irrational exuberance easily pushing my expenses to the 6 figure if I do not watch out, and that can be bad in future lean years.

It takes no work to use Quicken to automatically download and classify my expenses after the fact, as we pay for everything with our AmEx or credit cards.
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Old 12-30-2013, 06:04 PM   #157
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Here is 2013 spending of over 1% of $58k total. 1388448131279.jpg

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Old 12-30-2013, 07:08 PM   #158
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Just did my rough approximation for 2013.... (single, 2 kids, pretty high cost area):

Expenses (excludes payroll deductions, i.e. health insurance and taxes):
Total: $56,501

Some of the major categories...
Childcare: $24,804.50
Property Tax: $4,642.53
utilities: $3,500.13
everything else: $23,554.07

Excluding the childcare (which went up a lot this year but should drop a lot in 2015 and even further in 2016), my increase in spending over 2012 was 1.02%
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Old 12-30-2013, 07:35 PM   #159
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Scanning these posts, it seems that almost all or all of us are naturally frugal and we don't really want to spend much more than we are already comfortably spending. I know for myself, there are many things I could spend money on that would not increase my satisfaction at all, and might even decrease it. When I had a wife and kids at home, I enjoyed spending some money on them.

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Old 12-30-2013, 08:17 PM   #160
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I've worked hard my whole life, my parents saved money.....bought my brother and I each a color TV set years ago while they still watched in Black and white and left me a hefty amount of money for the times when they passed on.

Well, I'm sort of doing the same thing and trying to change. I've made and saved money, paid for my kids college and weddings, have a healthy 401k, assets of a few million, and believe it's about time to enjoy it. Why? my kids spend most of what they make and whatever I leave them, they'll spend.......not foolishly but they'll take nice vacations, buy new cars, switch to newer smart phones,,,,,etc. So, I might as well do the same since I can afford it. Actually, I grew up in a 700 sq ft home, had a paper route and had to pay room and board when I was 12......not complaining because my parents gave me all the money back for a down payment on my 1st home when I got married.......I'm rambling because I worry I'm spending too much but I have it.....spend well under 3% of my net worth each year and seem to constantly be outspent by my peer group. I love "early retirement" blog because so many really smart people give out so many good ideas. .......now, I wonder if I give enough to charity, how much I should leave my kids, grandkids and how much I should help some of my lazy, broke distant relatives. I think kids should be taught a strong work ethic and too much money can destroy the need to work.......I truly respect some of you that live on less than 30k a year but to be honest, I'm glad I don't have to. In closing I worked hard and I'm really lucky.....have my health, a good immediate family and enough money......and, I'm very thankful.
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