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Old 09-11-2015, 08:54 AM   #41
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Do you have any concerns about your daughter's ability to LBHM? After all, your NW is an outlier, reversion to the mean is real, and inheritances can be spent down quickly without financial discipline.
No. She and her husband are very responsible and careful with money. They have good jobs and futures. We will help them financially along the way but don't have significant concerns in this regard. They don't feel or act entitled and have never asked for anything. We gifted her enough prior to the wedding to allow them a good down payment for a decent house in Toronto but they are in no hurry and will continue to rent for a few years.

She is not likely to receive her inheritance until in her 60's so she should be able to handle it. Her husband is a CPA so should be able to self manage it if they wish. My plan is to bring them more into our financial affairs as we age so it's not such an abrupt transition.

I feel there is only so much you can do in this regard. The best thing is to set a good example and hopefully we have done that.
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Old 09-11-2015, 08:56 AM   #42
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No. She and her husband are very responsible and careful with money. They have good jobs and futures. We will help them financially along the way but don't have significant concerns in this regard. They don't feel or act entitled and have never asked for anything. We gifted her enough prior to the wedding to allow them a good down payment for a decent house in Toronto but they are in no hurry and will continue to rent for a few years.

She is not likely to receive her inheritance until in her 60's so she should be able to handle it. Her husband is a CPA so should be able to self manage it if they wish. My plan is to bring them more into our financial affairs as we age so it's not such an abrupt transition.
That's good to know. The bolded statement suggests she has her head screwed on!
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Old 09-11-2015, 09:40 AM   #43
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Each year is different but a couple of recent overages would include redecorating our Toronto condo(not in plan at all) ,my daughter's wedding which went way over plan, a lot of unanticipated maintenance at our lake house, and a new vehicle we weren't planning for. All the regular stuff balances out each year and is very easy to plan for.
We maintain an extra line of the spreadsheet for major items. We try to spread them over multiple years. The purchase of the condo was a different year than the purchase of the new car.
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Old 09-11-2015, 09:53 AM   #44
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That's good to know. The bolded statement suggests she has her head screwed on!
Yes, I am very proud of her.
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Old 09-11-2015, 09:56 AM   #45
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We maintain an extra line of the spreadsheet for major items. We try to spread them over multiple years. The purchase of the condo was a different year than the purchase of the new car.
I put the large special items in red but leave them in the appropriate category. We have a list of 3-4 items that are queued up over next 2-3 years. Eg new bathroom at lake house, new boat, etc
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Old 09-14-2015, 02:32 AM   #46
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Fortunately my wife and I are both "savers" though she routinely wins at this game .

We budget by saving anything over monthly budget (around 8k) first and tracking every month. We go over sometimes and under others but it hovers pretty close.

For anything excessive we "fyi with veto" but that's never happened. I think we both stress about spending on big things enough that it doesn't seem to impact.

Things like vacation, etc we plan together so no biggie.

We are not fired yet though act as if we are in order to get comfortable. So far the only stress has been market volatility which has impacted post fire asset allocation... I'm not nearly as robust as I think I am .

But of course after fire maybe we'll go nuts or something. So far this hasn't been an issue.

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Old 09-14-2015, 08:34 AM   #47
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With a SWR of only 2.5% and a considerable cushion built into my budget (and my overall portfolio), I use the budget to monitor, not control my spending.
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Old 09-14-2015, 10:38 AM   #48
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Both, I use a budget to track essential expenses and control spending such as recreation and entertainment.
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Old 09-15-2015, 09:20 AM   #49
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I'm a numbers person, always will be, so I download our credit card transactions and assign categories to all of our spending. I add the few things paid out of the checking account but don't bother with cash because it's negligible.


I know what we need from our brokerage accounts every month and as long as we stay within those limits I don't get crazy about where it goes. I do like to be able to back out one-time hits, like those related to our recent move, and purely discretionary travel (as opposed to occasional trips to see our granddaughter 3 hours away, which is NOT negotiable!) to get an idea of our baseline expenses. I also like to see which are changing substantially.
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Old 09-16-2015, 01:43 PM   #50
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Just seeing what I am spending is enough. If my spending is inordinately excessive, I find myself automatically putting off discretionary stuff more or less by reflex.

I don't know if my method would work for two people, though! Luckily the only person spending my money is me.
Although we are still working, I can tell you this does work for two people, if the second person in question really has no interest in monetary details. DH is on board with our savings/retirement plan, and he lets me worry about the details.

If we have a month where the credit card bill is larger than normal for whatever reason, I just tell him we are broke for a little while and need next month's bill to be lower. So, he spends less on discretionary things, until I tell him we are OK again.

Obviously we aren't broke, but he knows it means our checking account balance is getting lower than I like.
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Old 09-16-2015, 05:32 PM   #51
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Since still working (projected ER 9 months and counting ), my budget is more of a look-back to track spending and develop an idea of typical expenses. We do not do any specific budgeting, just discuss any big expenditures. Normal expenses are easy to track and control, it is the unexpected bigger ones that cause difficulty. I guess that is the cushion budget expense many of you refer to, which can vary considerably each year. The fixed portion of budget is quite stable, it is the discretionary that is inconsistent.
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Old 09-16-2015, 06:55 PM   #52
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We've adhered to a budget/spending plan for over 30 years, and that continued into retirement. Having a budget lets us know we're on track. If we choose to over or under spend, we do so consciously and there aren't any surprises. Keeping a budget is reassuring to us, not a source of friction in any way...
+1 We've utilized a budget since we married (+42 years now). Over the years this has helped us better understand our spending habits, and put us pretty much in a LBYMs mode. In retirement, it has helped to break down our budget into three areas -

  1. Those expenses we have limited control over (HOA, Auto/Home/Health insurance, property taxes, etc.).
  2. Those everyday expenses we have total control over (credit card and cash withdrawals).
  3. Travel and the little extras that we plan for during the year.
This is all on one simple spreadsheet that automatically totals and adjusts the required income from investments (and how much is needed in investments to cover that income withdrawal. I've set it up so that the wife (who has little interest in finances) can take over when I'm no longer able - she has run it in the distant past. Left side is the limited control expenses. Right side is charges and cash withdrawals. Bottom has area for travel and extras that come up during the year. Fairly simple tracking for all areas as it is important for us to understand what we'll need for the year and where the money is coming from to cover it all.

Our retirement income relies on Social Security and Quarterly taxable account dividends (no pensions or annuity income streams). Our retirement accounts are currently not used for income.

We only write down and keep a running total on credit card charges and cash withdrawals. We've found it's too tedious for us to track cash expenditures, but need to know how much cash is being used monthly. This is the area where writing down/keeping a running total on CC charges and cash withdrawals monthly forces us to evaluate our spending habits. We've allowed enough each month so that it's rare that we go over budget.

The limited control expenses are entered yearly as they renew (different times of the year).

We've added an area for travel and extras with a set yearly amount to play with. This is the wife's SS. We keep it separate from retirement income to remind ourselves that it goes away when one of us does.
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Old 09-17-2015, 03:49 PM   #53
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This will sound crazy, but we have never really had a budget - all the years we have been married. I was retired for 4 years before we even did a spending "audit" (write down and add up every expenditure for a year.) Neither of us is especially into "toys". We like to spend on the same things at the same time (travel and eating out, for instance.) We are naturally frugal, but are willing to splurge at times. Full disclosure - due to working past FI as explained in other posts, our income flow and stash has made it perhaps easier to skip budgeting than for some of the folks on the forum ("No brag, just fact." from Guns of Will Sonnett.) Having said that, we never budgeted during the accumulation phase either. We "saved first" and spent the rest - I guess that was our budgeting method.

The only thing I watch carefully is our cash draw (from investments) at the first of the year - and if we are "forced" to draw more later in the year. We are able to "titrate" our total expenses within a year by seeing how much is left toward the end of the year. If there is much left over, we can give more to charity or buy a big ticket item or travel. It's about that basic and seems to work so far.

The biggest single factor making this all work is our similar outlook on money, "things", experiences, charity and commitment to each other. If this sounds "pie in the sky", I make no apologies (see quote from Will Sonnett above.)

I don't recommend this approach, I just throw it out to suggest not EVERYONE has to budget to control spending or even to plan. More than most situations, YMMV.
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