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Old 11-16-2007, 05:34 PM   #21
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Anyway, I'm fortunate enough to be in a position where they above lifestyle qualifies as living significantly below my means (LSBYM?). My annual net savings amount is more than my annual taxes which is more than my annual expenses - a good LBYM definition I would say.
Okay, I admit I was choking on your list until that last sentence - if you're saving more than 1/3 of your gross income, you're doing fine!
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Old 11-16-2007, 05:42 PM   #22
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DW and I never had a budget as such. We both make good money, and managed to stay in starving college student mode for several years after we graduated, so we always saved. When we got serious about retirement in 2002, I started tracking our savings. Looking at our tax return and how much we saved, I broke money into three categories: (1) Taxes, (2) Savings, and (3) Living. I developed a 'baseline' of how much we would accumulate given savings (increasing over time) and long-term expected average return for an 80/20 portfolio, and track actual savings, return, and portfolio total against that.

Now I have started tracking expenses (recently finished reading YMOYL) to see where the money goes, where we may want to decrease (and increase!) spending, and how spending might change in retirement.
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Old 11-17-2007, 07:14 AM   #23
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No budget here but I'm quite frugal, husband is well....ok. He only buys good quality such as Armani suits and alike. I wonder how it would be if I track my spending daily but it's just too much work. I did try back 4-5 years ago afterwards, I set an amount of how much I should be spending monthly. However, found out I could never stick to it although some months are higher/lower than another.

Now we have an almost 5months baby. I used to spend $500 only up to 2 years ago now it's probably $800. I mean how low could it go, right? :-)

No housing expense(picked up by the office), mortgage(all paid off), car payment...it's only clothing-some, groceries, a little bit of transportation. I tend to leave out insurance, travel, entertainment and we don't have specific budget for those. When we do travel, it's not a budget buster because we use mileage, hotel rewards. Once we went to Japan for 4 days, lived in Roppongi Hills and spent alltogether $500 mainly for food and sub fare. Husband thinks I'm "super saver" :-)

Well, maybe what I said doesn't really make sense.
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Old 11-17-2007, 08:40 AM   #24
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We never did a budget until ER. Then we did an extensive exercise. In the process we indentified a number of areas where we could cut back without any adverse impact (multiple credit cards with annual fees, for example). The real value of the process was setting up the monthly tracking of actuals. Now I exclude special items and do a full year forecast (e.g. 4x 1Q YTD) then add back in the special items.

We adopted home swapping when we saw the costs of travel. We bought a condo in PV when we saw the rental trends. We stopped buying new cars. We got rid of much insurance. We switched to paygo cell phones. We started shopping at Costco and the dollar store. We use craisglist and ebay. We sell off stuff we are not using (and give it away if it does not sell).

Again we are getting our value from the actions to change spending patterns rather than to try to adhere to a budget.
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Old 11-17-2007, 11:23 AM   #25
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Don't budget as such. I track expenses each month and look for areas we can save, but we don't have a family budget. When our income was a lot lower we used to save for luxuries like replacement cars and vacations. We never borrowed for anything, ever, except a mortgage. Even immediately after college when we had the biggest temptation. to borrow (2 earners on decent salaries but we made ourselves wait for the things we wanted).
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Old 11-17-2007, 10:43 PM   #26
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I don't have anyone to share their money with me so only have my budget.
I work on mine on a annual basis and don't budget tightly on little things. I pay the mortgage, insurances, taxes, utilities and anything like that when they happen but plan ahead for the rabbit in the python times like property taxes twice a year to make sure I have funds. For the little things like gas, food and misc spending I use cash I get from my roommate weekly and deposit any extra into the bank.
I am a natural LSBYM kinda women so don't need to track what I spend on shoes, I know it was $84. because I remember.
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Old 11-20-2007, 12:36 PM   #27
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We have a yearly family budget. I used to use quicken to track our finances but found the it was overkill. I spent more time adding information into the program then actually getting valuable data out. Last year I downloaded a budget template off of Fidelities web page. Simple spreadsheet with rolling totals and summary's. We set the budget based on 2006's spend estimates + 3% inflation.

Each month my SO and I review the numbers to look for area's of improvement. We have a blank budget sheet for each month and as we spend we write the $ into the block in for the catagory. At the end of each month I add that months spend to the spreadsheet. I put special notes on catagories for the next month to show where we ran over the month before.

This may sound like alot of work but it takes minimal time and gives us the inforamtion that we need to make decisions.

I would say that the hardest part of budgeting is the decipline - going from a make and spend mentality to make - hold/save - spend is very different. My SO hates it because she used to be able to spend and not really care. Now she's on an agreed budget.

Having 5 people to feed is our biggest challenge averaging $150-$160/per person/month. Now we are cutting coupons and driving to multiple places for the deals. Our goal is to get that to $140 - very achievable and I have been amazed how much $ were saving with coupons.
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Old 11-20-2007, 01:02 PM   #28
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no budget. before quitting i looked at my yearly expenses, padded all that, added for tax, home improvements, health insurance (which just went up to $350 from $297/month, having never made a claim, the jerks), etc.

good thing i padded, huh?

all that came in at about the 4% figure. then, when i added future hopeful social security and pension or even future proceeds from house i'll probably sell, i got the figure i could use to include travel.

so if i have a budget it is simply my normal spending plus some. in two years i've yet to spend but a small fraction of the plus some. i don't need to budget; that's too difficult. i just need to continue being cheap & easy.
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Old 11-20-2007, 08:11 PM   #29
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I'm not very sure if my husband would ever agree to specified budget. His principle has been, as long as we don't buy too much or budgeting is not the way to save or get more money what we should do is to increase income.

I have only recently(since we had a baby-5 months) start taking over food deparment in the house. Before, we eat out 90% of the time(again, husband thinks it's too much trouble cooking for 2) and I don't want the hassle of trying to convince him.

Our spending/expenses are in medium range, I think...we turn lights off when not in use that sort of thing...and we're minimalist so not much clutters at home. I actually think by looking around and compare ourselves to others that we're quite a simple couple. We don't own many things and "depriving/delaying" purchase is in my gene :-)

Our income varies. Husband owns his company with international subsidiaries, I work for someone. Although I have fixed salary, it is account for less than half of my other income such as rent, equity, CD, interest from loaning money to relative(oops, this could spark another debate but no worry here, it's a safe return).
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Old 11-20-2007, 08:17 PM   #30
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Yes, Budget!!!!!!!!!

Easily predictable things that have no emotion attached to purchases are on spreadsheet. Includes mortgage, car replacement fund, cable, phone, car insurance, etc...

Whats left over makes it in to envelopes and we pay with cash groceries, gasoline, haircuts, kid entertainment, restaurant, kid clothes, adult clothes, vacations, home repair etc. etc. etc.... When the envelope is empty you stop spending. Impossible to lose control, takes less than 5 minutes a week to execute and has captured many tens of thousands of previously wasted dollars over the last 2 1/2 years.
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Old 11-21-2007, 08:32 AM   #31
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Yes, Budget!!!!!!!!!

Easily predictable things that have no emotion attached to purchases are on spreadsheet. Includes mortgage, car replacement fund, cable, phone, car insurance, etc...

Whats left over makes it in to envelopes and we pay with cash groceries, gasoline, haircuts, kid entertainment, restaurant, kid clothes, adult clothes, vacations, home repair etc. etc. etc.... When the envelope is empty you stop spending. Impossible to lose control, takes less than 5 minutes a week to execute and has captured many tens of thousands of previously wasted dollars over the last 2 1/2 years.
We do a similar activity but use the credit card - by using it the credit card company and the company that we purchase from provide $ into our kids 529 plan tax free - it can be more the 10% free $ so it is worth it.

We use monopoly $ in an envelope marked discretionary $. Achieving the same goal while maintaining the benefits.
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Old 11-21-2007, 08:46 AM   #32
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I keep a "budget" in my financial software as a baseline for what I think we should be spending. Every now and then I'll review it to see where we're exceeding "budget" (for both particular categories and the overall cash flow) and see whether this is an expense we can get down of if my original budget estimates were unrealistic.

We don't do "hard budgeting" in that we stop all spending on category X if the budget for it is gone. I wouldn't want to live that way. But I do track where the money goes to see if there are things we could be doing better in terms of keeping spending under control.
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Old 11-21-2007, 09:28 AM   #33
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I work with what I think of as a budget backwards.

I have set an automatic payment from each paycheck to various expense categories, phone, insurance, lights, utilities, and a big catch-all for credit card. I shop using the one credit card (groceries, drug store, etc) so all the bills are combined. My paychecks are not monthly, so I let the recipient worry about converting my periodic payments to their monthly billing cycle, instead of the other way around. Whenever I feel like it, I open incoming bills and see if I'm in balance. If all is working, I'll likely have a small credit balance, so I can just discard (file) that bill. If I see credit balances rise, then I can adjust the autopay down. If I see credit balance decline or amount owed, then I know I have to see what's going "over budget" there. But that's pretty rare.

I know I could probably do something similar without running the small credit balances all over town, but really the amounts are small and a price I'm willing to pay for the combination of convenience and a workable system that keeps my spending within preset limits. I know I cannot go wild without upsetting the system, so I tend to stay within plan without having to think about it. Since I'm mostly used to this level of spending, anything above that in the paycheck is automatic candidate for savings.
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Old 11-21-2007, 12:48 PM   #34
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I have a savings plan, but not a budget. I set target savings goals each year (which right now is about 30% of my income). Since that all happens automatically (via paycheck or automatic transfers out of checking), I never see that money.

Then, I can spend whatever is left. Every once in a while I will notice that I have thousands of $ in my checking account, and then I just transfer more of it into savings. I use the money in savings for big ticket items - vacations, next car, house repairs etc. The savings account is fluid - but the money that goes to my brokerage account and 401k have never been touched (so I try to get my money into those as often as I can).
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Old 11-21-2007, 05:34 PM   #35
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Maurice, I think a lot of us would love to see a categorical breakdown of that spending. Not to critique your spending, but just to see what a $168k budget looks like.
You and Maurice might be interested in this link. It has the results of the BLS survey on expenditures. Note that their highest category is still below Maurice, but it gives an idea of what's large and small for "average" high income families.

ftp://ftp.bls.gov/pub/special.reques...gherincome.txt

However, I'd agree with the statement that if you're saving more than you're spending, then you don't have spending problems.
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Old 11-21-2007, 05:46 PM   #36
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Interesting. The more you have, the more you spend in just about every category. Except tobacco.

And who are those 20 people with incomes over $200K collecting food stamps?
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Old 11-21-2007, 06:45 PM   #37
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My budget is simple. I take out $200 twice a month from the ATM. The first thing I do is deposit $20 into an envelope. The rest of the money is used to make all my purchases at regular stores (e.g., grocery, department, drug, clothing, etc), gas stations, restaurants, and other public or entertainment venues (e.g., movie tickets, videos, park entrance fees, etc). This includes purchases such as medicine at the drug store, but it does not include medical, dental, or veterinary bills. It includes gas, but not major auto repair or insurance.

Using cash in this way causes me to make constant cost-benefit decisions regarding potential purchases. If I want a magazine, I may not be able to get a video. I see how much I have left in my wallet and I know the number of days before my next ATM payday. It's a good strategy, at least for me.

I put left over funds (in $20 increments) into the envelope at the end of the half month period. If I want to purchase something more significant, I need to use the saved funds in the envelope. Hence, I have both a budget and a reason to save. At the end of the year, I deposit most of the saved funds into the bank.

Unfortunately, sometimes I cheat and use my credit card when I shouldn't.
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Old 11-21-2007, 08:35 PM   #38
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Does this table indicate that people with incomes of $236k only pay $16k in taxes? If so, my accountant has some explaining to do.
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Old 11-22-2007, 10:37 AM   #39
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Does this table indicate that people with incomes of $236k only pay $16k in taxes? If so, my accountant has some explaining to do.
I'll agree that the FIT numbers look way low. That's true throughout this data, not just for the high incomes. I haven't been able to find an explanation. This generates some uneasiness about the rest of the data, but I think the BLS emphasis here isn't on taxes.

I noticed, also, that social security taxes are included with "Pensions" in one of the last "spending" lines.
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Old 11-22-2007, 02:38 PM   #40
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We have bugeted and reviewed our spending for over 20 years. As a result, we can comfortably make retirement decisions based on a huge base of knowledge of actual spending patterns and needs. It is probably our best reason for doing it.

We spend 1/3, pay taxes of 1/3 and save 1/3 and have done for as many years.
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