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Budget Review Frequency
Old 02-21-2018, 08:51 PM   #1
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Budget Review Frequency

How often do you review your budget? I just retired and I feel the need to review my budget. This is frankly, something I've never done before. I would make money, save money, and at year end, I'd review my change in net worth.

Now that I'm retired, I feel the need to review monthly. I suspect that this will turn into quarterly and then annually as time goes on. Looking for some input from the group on how often you review your budget to actual and does it indeed lessen over time?
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Old 02-21-2018, 08:58 PM   #2
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I retired nearly 3 years ago. I review my expenses quarterly and log them in a spreadsheet. I look to see where I am either under / over and try to understand the driver of the variance. During 4Q I look to take advantage of large underbudget variances by making "out of budget" purchases. 1st year it was a hot-tub. 2nd year it was a small boat. Review your budget as often as you feel comfortable. You'll find your own sweet spot.
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Old 02-21-2018, 08:59 PM   #3
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I don't budget.

I do track all spending. I also make sure I'm under a 4% withdrawal rate very (too) frequently. Lately that's been about once or twice a week. At the same time I verify that I'm meeting all of my other financial goals (do I have enough cash on hand, do my kids' college funds have enough in them, is my asset allocation where I want, etc.)

I do think your thesis about checking less as time goes on is true for most and will be true for me also.
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Old 02-21-2018, 09:02 PM   #4
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Quote:
Originally Posted by Jerry1 View Post
How often do you review your budget? I just retired and I feel the need to review my budget. This is frankly, something I've never done before. I would make money, save money, and at year end, I'd review my change in net worth.

Now that I'm retired, I feel the need to review monthly. I suspect that this will turn into quarterly and then annually as time goes on. Looking for some input from the group on how often you review your budget to actual and does it indeed lessen over time?
Annually to look at where the overall spending went.

Quarterly more or less to see how the total spending is on track versus the total budget. Only break out travel, gifting, and special expenses at this level.
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Old 02-21-2018, 09:20 PM   #5
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I came up with a proposed budget a year before RE. (4 years ago). I track my health expenses (need for HSA) and anything needed for taxes. I don't track other spending. I haven't revisited the budget since I put it together.

I'm now playing with understanding how larger roth conversions would affect us. That will screw up the budget that I ignore.
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Old 02-21-2018, 09:21 PM   #6
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I'm not retired yet and check my spend semi-annually.

If you are checking your budget more frequently...congrats, its a new hobby for you in retirement. Nice to have extra free time.
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Old 02-21-2018, 09:54 PM   #7
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Originally Posted by SecondCor521 View Post
I don't budget.

I do track all spending. I also make sure I'm under a 4% withdrawal rate very (too) frequently. Lately that's been about once or twice a week. At the same time I verify that I'm meeting all of my other financial goals (do I have enough cash on hand, do my kids' college funds have enough in them, is my asset allocation where I want, etc.)

I do think your thesis about checking less as time goes on is true for most and will be true for me also.
Similar story here. When I retired I had a pretty robust budget. For the first few years I updated it annually. I'm not sure when I last updated it.

While I do keep track of spending in Quicken, I hardly ever compare it to budget. In my case, the budget was to get comfortable with our total living costs for a year.
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Old 02-21-2018, 10:05 PM   #8
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I track my spending pretty much every single day, and then at the end of each month I look at how much I spent in each category and project what my spending will be by the end of the year.

I probably spend too much time on tracking my spending, but it is fun for me.
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Old 02-21-2018, 10:50 PM   #9
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I have been retired for over 5 years. Prior to ER, I had developed a detailed budget spreadsheet, including a cumulative variance column. I tracked all expenses by category and subcategory monthly for the first three and a half years. By that point, I had a pretty good idea of my spending patterns, so I discontinued the monthly budgeting exercise. I continue to calculate NW and WR annually and have kept WR in the 3-3.3% range until this year, when I have been blowing that dough.
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Old 02-21-2018, 11:07 PM   #10
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Don't have a budget per se, just a total annual spending target determined from many years of detailed spending data in Quicken. During the first couple of years after ER I was reviewing monthly to quarterly because of significantly variable expenses (due to cross country move, shift to COBRA then off of COBRA, etc.) Now I am trying to do a semi-annual review with DW of larger spending areas and condition of the portfolio.
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Old 02-21-2018, 11:26 PM   #11
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"Review" has a lot of different meanings to different people. So does "budget."


Because my overall budget has a built-in surplus, or cushion, what I do at the start of the year is to project for my checking account my cash inflows (monthly and quarterly dividends) and cash outflows (expenses) to see where my surpluses exceed $500. That's the general minimum cushion I keep in the account to cover smaller, unforeseen expenses. When the surpluses exceed $500 over many months (lumpy expenses need some surpluses carried forward), I invest them elsewhere. This happens a few times per year.


I monitor this projected checking account register, for lack of a better term, and update it as the actual dividends come in and actual expenses go out. Sometimes, the excess dividends I planned to invest elsewhere disappear. Sometimes, they get bigger.


I don't have set quotas for my expenses. If I need to buy something not planned for, I do so. If my regular surpluses can cover them, that's fine. If the expenses are too big, I can tap into a slush fund I have elsewhere. That very rarely happens.


I have annual totals I keep track of elsewhere, including a spreadsheet which projects annual expenses through age 65, when all of my "reinforcements" will become available. For now, and for the last 9 years, I have been living off my taxable accounts, mainly the dividends they produce. This makes for a low SWR, in the 2%-2.5% range, so I am not worried about running out of money.
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Old 02-22-2018, 12:24 AM   #12
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We look at our spending twice a year, mid year and end of year. DH uses Quicken and runs the spending report.
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Old 02-22-2018, 02:19 AM   #13
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Its funny, before ER, I was looking at our spending, budget, investments, etc. regularly and constantly crunching numbers. Now that weve ERd, I only looked at budget for 2017 once - in January 2018, when I tallied up actual spending and compared it to the budget. Luckily it looked fine.

It probably depends on your financial situation; in our case, we have lots of cushion so we can be pretty relaxed about it. Its been interesting to me how much MORE relaxed I am about it now that we are actually retired.
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Old 02-22-2018, 05:09 AM   #14
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I track my spending pretty much every single day, and then at the end of each month I look at how much I spent in each category and project what my spending will be by the end of the year.

I probably spend too much time on tracking my spending, but it is fun for me.
+1.
Just retired last year. Wish to see how I stack up, since my budget also included tracking expenses in a MCOL vs. a very HCOL.
Like W2R, it is fun for me too and for me takes about 5-10 minutes a day.
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Old 02-22-2018, 05:13 AM   #15
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Last year (1st year of RE) I did a monthly check of our spending by category. We were very close to my pre-RE estimate (except for where I knowingly spent up for travel). This year, I am just watching the monthly total.
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Old 02-22-2018, 05:35 AM   #16
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We don't have a budget but our annual spending stays pretty much the same; just spent on different things each year (or the same things with different costs).

Our lifestyle is a sort of regulator.

What I do however is track our spending every month with a projection for the year.
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Old 02-22-2018, 06:30 AM   #17
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I don't budget.

I do track all spending. I also make sure I'm under a 4% withdrawal rate very (too) frequently. Lately that's been about once or twice a week. At the same time I verify that I'm meeting all of my other financial goals (do I have enough cash on hand, do my kids' college funds have enough in them, is my asset allocation where I want, etc.)

I do think your thesis about checking less as time goes on is true for most and will be true for me also.
pretty much me.
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Old 02-22-2018, 07:02 AM   #18
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I track & categorize expenses weekly. Not so much to 'budget', but rather to know where it's going. For example, it helped me quickly spot 2 $600 fraudulent credit card charges.
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Old 02-22-2018, 07:06 AM   #19
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Our "budget" categories are more guidelines, but we do keep track of spending monthly. As some have said, there is a lot of cushion in our budget, so if one category is out of wack, there is usually another category that is "underspent". In other cases, if we overspend in one month I find that we try to revert to the mean in following months. Our total core expenses vary very little from year to year. As W2R said, it is fun for me to track and analyze expenses. Different strokes for different folks.
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Old 02-22-2018, 07:15 AM   #20
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Annual review. Start with January 1 balance add all deposits and subtract end balance. Or simply look at the end balance. It has always been a positive number so we're good.
Kidding aside, retirement is the first time we've actually had a somewhat consistent income level. It is much less complicated than the 30% variations during our work years.
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