Budgeting/Expense Tracking - Practicalities

[FUEGO]

I just use WordPad. Every time I spend money I make an entry. I only spend money about 15 times per month so it's pretty easy. I'm sure couples, especially those with kids, would have many more entries. Here's an example of what I do:

Simple, easy. 7 categories. I like it. Yes, we have a lot more than 15 transactions unfortunately. Maybe 60 a month if I had to guess. Lots are rather small dining out charges or a couple bucks for a gadget or thing off the internet.

 

[FUEGO]

Yes, financial support is the money that I send to my mom when she needs a bit of cash. The reason why I do not lump it with gifts/charity is because I regard gifts/charity as discretionary spending (spending that can be cut in an emergency) but not financial support. I consider financial support a committed expense.

That approach makes sense. We are occasionally asked to "donate" money to help out relatives back in their home country or in the 3rd world area known as Long Beach, California. Usually small-ish amounts though.

 

[Leonidas]

Simple, easy. 7 categories. I like it. Yes, we have a lot more than 15 transactions unfortunately. Maybe 60 a month if I had to guess. Lots are rather small dining out charges or a couple bucks for a gadget or thing off the internet.

Well, with that few transactions it's pretty simple then. You don't need quicken, and you could probably get away the the WordPad method as well. A spreadsheet would be a bit more exacting though.

 

[NeverBored]

Maybe I'm the only DW doing this and trying to get my DH to contribute....for the same reason you are, to make sure we're on target for retirement spending.

I use a spreadsheet, similar categories to Fuego's but I lump all utilities; I break out insurance by category; our kids are in college or out of the house, so one "kids" category covers what we spend on them except for college tuition (a lot). "Personal' is our allowance category, and I started breaking out "alcohol" just so it doesn't get lost in the grocery budget. I want DH to see that wine can be a significant cost and isn't just me buying too much produce that goes bad.

I leave Excel open on my laptop, and enter amounts when I spend them. I check off the receipt so I know it's been entered. That seems easier than a once-a-month accounting. If I spend cash, I enter it into the proper category that night.

Costco is the tough one; I go through the receipt and do a rough categorization. We buy a lot of food there, but also towels, underwear, gift cards, garden stuff, etc.

We just took a weekend trip and bought some wine at a winery. I decided it was "alcohol" and not "travel." The lunch, dinner and museum fees however went into the "travel" category.

I used to do this on my Palm, but I have the laptop with me most of the time anyway and it's been easy to do. I have a worksheet for each month of the year and enter the numbers which then sum automatically.

 

[RonBoyd]

letting me know where the money that drips from the bottomless hole in her purse actually goes. Keeping track of every penny is not very important, but keeping track of every $5 or $10 is important over the course of a year.

I am late to this (thank goodness) so I don't have to tell you there are many ways to "skin this cat." I have kept track of every penny we have spent in the past 35 years -- so I do have some experience at it, however. (As I have related in other threads along these lines.)

I will, nonetheless, add a few words of advice:

Don't put unneccesary pressure on the other person -- "bottomless hole" my foot. In order for this exercise to work, everyone has to be 100% on board.

An old business adege: (I tried looking for the exact quote but... ) "It is the pennies that count; they add up to dollars." (Sort of the poorman's version of "A million here, a million there and pretty soon it adds up to real money." It is the pennies that will trick you into thinking everything is all peachy -- mainly because it gives permission to cheat.

 

[FUEGO]

Don't put unneccesary pressure on the other person -- "bottomless hole" my foot. In order for this exercise to work, everyone has to be 100% on board.

An old business adege: (I tried looking for the exact quote but... ) "It is the pennies that count; they add up to dollars." (Sort of the poorman's version of "A million here, a million there and pretty soon it adds up to real money." It is the pennies that will trick you into thinking everything is all peachy -- mainly because it gives permission to cheat.

I'll be happy if DW is 99% on board and lets me know where the big cash transactions go. If she leaks out a buck or two here and there on coffee or breakfast or lunch at the company cafe, then I'll capture it in "cash". Those expenditures are ok with me and are just a cost of working as far as we are concerned. They really are very tiny. Well over half our income gets saved and invested, so a couple bucks here and there are basically rounding errors in the grand scheme of things.

This may sound overly possessive and controlling of me, but DW almost always asks me for cash instead of going to the ATM (that is directly on her way home to/from work and a block from our house). More of a laziness thing for her than anything though. When I say it like that, I really am a walking ATM to her. I just hope my daughters don't figure out how this works.

 

[Leonidas]

... but DW almost always asks me for cash instead of going to the ATM (that is directly on her way home to/from work and a block from our house). More of a laziness thing for her than anything though. When I say it like that, I really am a walking ATM to her. I just hope my daughters don't figure out how this works.

You are not alone in the club. I frequently comment that it is against my wife's religion to use an ATM.

I never had any problem with her spending money, she's generally quite frugal, but the last second need for cash (that necessitated me going to an ATM) was a PITA.

Asking her to use the rewards credit card has cured about 90% of that. There are a lot of $5 and $10 charges here and there, but she doesn't spend any more money than she did before and I get points for all the purchases. And all of those transactions get downloaded so I don't have to keep track of cash receipts. It's a win-win.

 

[Tesaje]

Careful, once you get in the habit of keeping track you might not be able to stop. I've been doing this for decades and it is great to know exactly where mymoney is going.

One of the programs is easy to set up and easy to track. I'm using Moneydance now.

Cash- this is the hardest thing to get tracked. I would try to get in the habit of always asking for a receipt for everything. If that doesn't work, track the amount of cash you have at periodic intervals so you get a sense of how much you and how fast. It is a really good exercise to track every penny for couple months. It can be an eye opener.

Your categories look fine. You can always refine later if you want more detailed data.

My method is to collect receipts for everything, enter in my categories which means divvy up the items accordingly. But your broadbrush approach gets you part way. The trouble I have with those stores is they sell so much stuff in other categories. Then when the bill comes in, I reconcile my data for it against the bill.

The trick for data entry is to do it often so the chore is small.

 

[cj]

Careful, once you get in the habit of keeping track you might not be able to stop. I've been doing this for decades and it is great to know exactly where mymoney is going.
......
The trick for data entry is to do it often so the chore is small.

I agree - we started "keeping track" about 5 years ago. I don't have a "cash" category; I track everything when I spend it. One thing I do is get a receipt for everything and always put it in my wallet. I then I record the spending items every so often when I clean out my wallet. I do have a "misc" category that I use sparingly (getting stamps at the post office, other things that don't seem to belong in any category).

I do love to have the records of what we spent. I know exactly how much we spend on things so when it comes to retirement planning, it'll be pretty easy to know what we need to budget for. Having the records also lets me answer the question, "when did we buy this <thing>?"

 

[W2R]

I am probably a little (a lot?) odd, but every month when I receive my bank statement I am really excited. Why? Because I am just dying to type in the stuff and see how much I spent in the previous month.

For some reason I get a huge charge out of this. Perhaps my Scottish heritage?

 

[TromboneAl]

I don't expect the "copy and paste" idea will work as well as downloading to Quicken or some other application. This goes for you too, W2R. "Type in"? As my daughter would say "What is this 'type in' you speak of?"

I hate Quicken, but it knows that Safeway purchases are groceries, and Chevron purchases are gasoline, and it saves me a lot of work.

Here's one way to handle cash. Go count up all the cash you have in wallets, purses, safes, etc. That's the balance in your "Cash Account." Enter that in as the starting balance.

Whenever you make an ATM withdrawal or receive cash, add it to the Cash Account. Whenever you pay for something with a significant amount of cash, record the transaction as a deduction from the Cash Account.

Periodically repeat the procedure of counting up your cash, and compare that total with the total of the Cash Account. It won't match. If you can think of any major transactions you didn't include, enter those. Otherwise, make an entry for "Miscellaneous Cash Expenditures."

For example, at the end of March you show $520 in your Cash Account, and you only have $200 around the house. You remember that you bought a pet rock on Craigslist for $20, so you enter that, and you enter an amount of $300 for Miscellaneous Cash Expenditures.

 

[W2R]

I don't expect the "copy and paste" idea will work as well as downloading to Quicken or some other application. This goes for you too, W2R. "Type in"? As my daughter would say "What is this 'type in' you speak of?"

I hate Quicken, but it knows that Safeway purchases are groceries, and Chevron purchases are gasoline, and it saves me a lot of work.

That may be true, but I still like spending 5-10 minutes/month typing my expenditures into Excel. (Well, Open Office's equivalent spreadsheet). Why? I have NO idea. Maybe the idea of giving in and finally buying Quicken engenders some control issues for me? Or maybe I am just old fashioned.

 

[aaronc879]

I am probably a little (a lot?) odd, but every month when I receive my bank statement I am really excited. Why? Because I am just dying to type in the stuff and see how much I spent in the previous month.

Does that mean you don't track purchases made with cash. All of that eating out in New Orleans can't be cheap. Make sure you're including that if you want an accurate account of your spending. I'm sure you do that but you didn't mention it so i'm just making sure.

Also, you only see you bank statement once a month? Don't you have online banking. I look at my account at least a couple times a week.

 

[aaronc879]

Maybe the idea of giving in and finally buying Quicken engenders some control issues for me?

Maybe I take being frugal a little too far sometimes but I can't justify tracking my spending by buying something(Quicken) that I don't need. I can do the same thing for free with WordPad... so I do.

 

[W2R]

Does that mean you don't track purchases made with cash. All of that eating out in New Orleans can't be cheap. Make sure you're including that if you want an accurate account of your spending. I'm sure you do that but you didn't mention it so i'm just making sure.

Also, you only see you bank statement once a month? Don't you have online banking. I look at my account at least a couple times a week.

I tracked my cash purchases specifically (including which restaurants, how much was spent, and so on) in December out of curiousity. Now, I just track "cash" and if it is just $400-$500 I don't worry about it. If it goes up to $600, then I make sure it is less the following month.

I do online banking and I check it every morning to see how I am doing, but for adding up my expenditures I wait for the paper statement. It goes from the 23rd of one month through the 22nd of the next so those are the dates of my "expenditure month". So, when I say that in July I spent $xxx.xx on electricity, that would be from the 23rd of July through the 22nd of August. I realize this is a logical disconnect and probably sometime I should fix that. If I got my expenditures from the online record some might slop into the wrong "expenditure month" in comparison with my paper statements. Or at least, that is my thinking...

 

[FIREd]

I didn't understand "Bank charges". What's that? No one pays any bank charges nowadays. Is that a mistake?

I do business with an online bank so I have to pay ATM fees every time I withdraw cash from a local bank's ATM (the fees eventually get reimbursed but, still, I like to account for them). I also get charged for wiring money to my charitable fund, though they just started to accept ACH transfers so those fees are going away. My old bank used to charge me to reorder checks too (my new bank does not).

 

[Chelhxi]

I am probably a little (a lot?) odd, but every month when I receive my bank statement I am really excited. Why? Because I am just dying to type in the stuff and see how much I spent in the previous month.

For some reason I get a huge charge out of this. Perhaps my Scottish heritage?

Ha ha. Me too. I like to track, pay bills, track networth, split receipts, etc. Anything with numbers or spreadsheets.

Regarding tracking, I do my own cash to the penny. But with my husband I just track when he withdraws cash. We use cards for almost everything so his cash usually isn't that much. He'll let me know if he uses cash for "joint" expenses. Since I track these differently from individual purchases. And he just keeps receipts in his wallet and I collect them every couple weeks.

I track mostly because I like it. If I just wanted a financial picture, I would just track income vs. expenses very roughly using the bank and credit card statements and networth using investment statements. There's really no reason I need to track as detailed as I do, but I enjoy it and am curious how certain categories might change if there are life style changes.

 

[Moemg]

I tracked my cash purchases specifically (including which restaurants, how much was spent, and so on) in December out of curiousity. Now, I just track "cash" and if it is just $400-$500 I don't worry about it. If it goes up to $600, then I make sure it is less the following month.

.

I know you love to LBYM so I'm shocked at your restaurant expenditure .It is surprisingly high . Considering It's just you so between you & Frank your restaurant expenditures are $12000 a year ! Yikes ! For that amount you could be cruising the Greek Isles .

 

[W2R]

I just got my bank statement today! So, I added up my February expenses - - a total of $1,083. It was low (for me) despite higher than normal ATM/cash expenditures. My $31 electric bill didn't clear until the day after the statement closed, which helped, and also my $20/month water/sewage/trash bill is billed every other month and this is the off month.

My average expenses during the four months since retirement are $1,563.

These expenses exclude the car (which was saved for over ten years), plus income taxes and medical premiums that are deducted from my pension before I get it. But even if I put the income taxes and medical and 1/12th of the car in my monthly expenses, I am still not spending as much as FIRECalc says I can afford. Yet I am honestly buying everything I might possibly want or need.

I don't want more money -- I just wish I had another 50 years.

I timed myself -- it took 2 minute to type in the numbers, less than I had thought. I only had 11 expenditures (ATM, check, debit card, automatic bank deduction) this month.

 

[Sue J]

I'm like W2R, I like to keep track of the details and I enjoy my spreadsheets. Certain monthly expenses are always the same so those I can just copy over each month.

Phone (Soon to be dropped, switching to Magicjack)
City Utilities (Electric, water/sewer, trash/recycling)
Car Insurance
Life Insurances
Internet
Gas (heat) on budget plan
DirecTV
Property Taxes (save 1/12 per month)
Home Insurance (save 1/12 per month)
Cash (set amount every 2 weeks, split between us)

Then I have budgeted categories for things that will vary-
Groceries
Eating Out (Friday night w/ family)
Gas (auto)
Other - includes clothing, car maintenance, gifts, medical copays and Rxs, vet, postage, periodic reloads to the pre-paid cell phones, misc expenses that occur, etc, etc.

All "shopping" is done using the PenFed rebate card and I move the "spent" money to a savings account and pay the PenFed in full every month. The rebated amount stays in savings.

I go to Walmart or Target once a month and split the expense into the proper category. It really only takes a minute to figure out what belongs in Groceries (food, toiletries, paper goods, shampoo, vitamins, cleaning products, etc) vs. Other (small appliance, yard, car, linens, etc.). I realize I have a lot of "etcs" but I do keep it consistent.

Right now our cash is $30 each every 2 weeks. We can use it for anything and we don't keep track. DH usually uses his for eating a lunch out and maybe a magazine or book. I rarely use mine and end up supplementing his when he's used his up before the end of the 2 weeks. I always end up with an excess and when I replenish my $30 I move what was left into my house stash, cash I keep around for .... whatever.

 

[NW-Bound]

I just got my bank statement today! So, I added up my February expenses - - a total of $1,083...

I timed myself -- it took 2 minute to type in the numbers, less than I had thought. I only had 11 expenditures (ATM, check, debit card) this month.

You need to take some travel with the [-]RV[/-] Venza! Spread your wealth the way you like it, or the gummint will do it for you.

 

[W2R]

You need to take some travel with the [-]RV[/-] Venza! Spread your wealth the way you like it, or the gummint will do it for you.

We are planning to drive somewhere for maybe a week or two sometime in the next month, as soon as Frank gets his gargantuan retention bonus check in the mail and safely in the bank. I offered to drive the Venza on this trip.

 

[NW-Bound]

We are planning to drive somewhere for maybe a week or two sometime in the next month...

For retirees, the time to LBYM is already past.

If one does not live AT her means in retirement, then when does she?

The economy always needs lots of stimulation. Party on!

 

[aaronc879]

My $31 electric bill

$31 electric bill this time of year? My last 4 have averaged over $200/mo. Looking forward to May-Oct where I average $40-something/mo. I may have a couple months where my total expenses go below $1000 even with my mortgage.

 

[W2R]

For retirees, the time to LBYM is already past.

If one does not live AT her means in retirement, then when does she?

The economy always needs lots of stimulation. Party on!

I'm trying!! Too busy enjoying a wonderful, idyllic retirement to get enough shopping in, I guess.