Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Do you have a family financial budget?
Old 11-16-2007, 05:37 AM   #1
Thinks s/he gets paid by the post
David1961's Avatar
 
Join Date: Jul 2007
Posts: 1,074
Do you have a family financial budget?

Do you have a personal or family financial budget? If so, how strict is it?

Personally, I naturally live below my means, and I have never felt like I wanted or needed a budget. In some ways, I think I'd spend more if I had a budget. If I decide to buy something, I buy it, but only after I'm sure it is something I really want and will use.
__________________

__________________
David1961 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-16-2007, 07:27 AM   #2
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,852
Quote:
Originally Posted by David1961 View Post
Do you have a personal or family financial budget? If so, how strict is it?

Personally, I naturally live below my means, and I have never felt like I wanted or needed a budget. In some ways, I think I'd spend more if I had a budget. If I decide to buy something, I buy it, but only after I'm sure it is something I really want and will use.
Sure, though nobody is making me stick to it but me. So, I interpret it as loosely or as strictly as I want to. Here's how that works for me:

I keep track of my regular monthly payments, and check every day to make sure I'm within my budget on any payments that have come through. If my electric/gas bill is higher than I have budgeted, then I would probably tweak the thermostat, for example. Every once in a while I look at these regular payments and think about what I might be able to eliminate or reduce. I believe that regular payments are what most easily ruins LBYM attempts. They are insidious and can really nail you.

I have a certain target amount for other spending each month; you might regard it as an informal "allowance", I suppose. I keep track of how I'm doing on a daily basis when I examine my online checking account. If I spend more than my budget permits during one month, then I tighten the belt in the following months until I'm back on my projected savings level. On the other hand, if I spend too little and don't feel especially deprived, then I usually just adjust my projected savings level upwards.
__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is offline   Reply With Quote
Old 11-16-2007, 07:41 AM   #3
Full time employment: Posting here.
Sandy's Avatar
 
Join Date: Dec 2006
Location: Florida
Posts: 855
I have a set monthly target of spending for the family, but each month varies quite a bit. For example, in the spring when I have to pay for upcoming summer camps for kids, the budget is slammed. But what I have found is that other months are much lower than the average (late fall months). So on average, we stay within the target, but I don't sweat the month to month variations as long as I know the the spending is still "planned".
__________________
I would not have anyone adopt my mode of living...but I would have each one be very careful to find out and pursue his own way, and not his father's or his mother's or his neighbor's instead. Thoreau, Walden
Sandy is offline   Reply With Quote
No!
Old 11-16-2007, 08:18 AM   #4
Thinks s/he gets paid by the post
 
Join Date: Jul 2003
Location: Pasadena CA
Posts: 2,695
No!

No! We do not have a budget! Wife hates budgets

We do have a spending plan
__________________
T.S. Eliot:
Old men ought to be explorers
yakers is offline   Reply With Quote
Old 11-16-2007, 09:04 AM   #5
Full time employment: Posting here.
Kronk's Avatar
 
Join Date: Aug 2005
Location: Philly 'burbs
Posts: 547
Nope.

Track expenses, yes. Try to eliminate unneeded expenses, yes. I look at my 12-month rolling average to see where expenses are creeping upwards, but not interested in creating a preset spending limit.

Sometimes monthly expenses are $1800, sometimes $6500. Life happens, that's just the way it goes.
__________________
Kronk is offline   Reply With Quote
Old 11-16-2007, 09:07 AM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,032
How do people who have monthly budgets handle extras such as vacations ?
I track my spending and live below my means so no formal budget .
__________________
Moemg is offline   Reply With Quote
Old 11-16-2007, 09:23 AM   #7
Full time employment: Posting here.
Lusitan's Avatar
 
Join Date: Jan 2006
Location: Boston
Posts: 620
We used to track - not budget - all of our monthly expenses, and found that the process of doing so naturally helped us "budget" our money and keep spending under control. We have fallen out of that habit over the past year, as the birth of our first child kept us busy with other things. But I still track overall monthly expenses and have found that on average we're still within our normal range.
__________________
Lusitan is offline   Reply With Quote
Old 11-16-2007, 09:39 AM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by Moemg View Post
How do people who have monthly budgets handle extras such as vacations ?
I track my spending and live below my means so no formal budget .
I have a "vacation budget" line item in the budget. We budget $2500 a year for that, to cover not only the "big car trip", but smaller stuff like water park weekends and stuff.........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 11-16-2007, 09:46 AM   #9
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,093
Quote:
Originally Posted by Moemg View Post
How do people who have monthly budgets handle extras such as vacations ?
I don't consider a vacation an extra. It's just another item I budget for on a monthly basis, although some months we obviously spend nothing in that category. I pay little attention to anything but the annual number. Same for other items that aren't predictable monthly spends, such as auto repairs and home maintenance.
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 11-16-2007, 10:05 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,643
No real budget. We have a list of estimated expenses. Then add a liberal vacation allotment and a big miscellaneous allotment. That constitutes our yearly spending plan. If we underspend the excess will go into a "mad money" account to be tapped when we get a wild hair up our a** or in bad times.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 11-16-2007, 10:05 AM   #11
Full time employment: Posting here.
 
Join Date: Oct 2007
Location: New York
Posts: 898
I started tracking expenses this year for the first time ever. I'm specifically trying not to limit my spending more than I normally would - I want a 'base case' to look at, then I'll analyze it to see (1) what I can/should cut down and (2) what would likely go down or up in retirement.

By the way - its kind of scary. This year my cheapest month was $12,500 and my most expensive one was $16,500 - and thats NOT including one off home improvement expenses that would never be repeated (e.g. bought some expensive art this year) but it does include home repair stuff that could repeat (e.g. fixed AC, replaced dishwasher).

Right now it looks like my expenses are running on average 14k per month, or 168k per year.

Ridiculous, I know.
__________________
Money's just something you need in case you don't die tomorrow.
Maurice is offline   Reply With Quote
Old 11-16-2007, 10:13 AM   #12
Full time employment: Posting here.
Kronk's Avatar
 
Join Date: Aug 2005
Location: Philly 'burbs
Posts: 547
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.
__________________
Kronk is offline   Reply With Quote
Old 11-16-2007, 10:17 AM   #13
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,093
Quote:
Originally Posted by Kronk View Post
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.
Financial voyeurism...
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Old 11-16-2007, 10:23 AM   #14
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
FinanceDude's Avatar
 
Join Date: Aug 2006
Posts: 12,484
Quote:
Originally Posted by Maurice View Post
I started tracking expenses this year for the first time ever. I'm specifically trying not to limit my spending more than I normally would - I want a 'base case' to look at, then I'll analyze it to see (1) what I can/should cut down and (2) what would likely go down or up in retirement.

By the way - its kind of scary. This year my cheapest month was $12,500 and my most expensive one was $16,500 - and thats NOT including one off home improvement expenses that would never be repeated (e.g. bought some expensive art this year) but it does include home repair stuff that could repeat (e.g. fixed AC, replaced dishwasher).

Right now it looks like my expenses are running on average 14k per month, or 168k per year.

Ridiculous, I know.
Only ridiculous if you CAN'T AFFORD IT...but it seems to me you are doing just fine........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)


This Thread is USELESS without pics.........:)
FinanceDude is offline   Reply With Quote
Old 11-16-2007, 10:59 AM   #15
Recycles dryer sheets
 
Join Date: Nov 2007
Location: Denver
Posts: 170
I have a budget because I am a spender and need to know where my limits are. At one point we were spending $1200 per month on groceries and eating out, we are down to $400 now. A budget let me pay off over $14k of debt last year and will let me do the same this year plus save the down payment for a house. People who don't tend to push their limits probably don't need one but people like me who would naturally spend what they make probably do.
__________________
Caoineag is offline   Reply With Quote
Old 11-16-2007, 11:46 AM   #16
Full time employment: Posting here.
 
Join Date: Oct 2007
Location: New York
Posts: 898
Quote:
Originally Posted by Kronk View Post
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.

Ok - I'll bear my dirtly laundry for all to see. Keep in mind this isn't a budget - its YTD actuals through October.

At my 'top level' categorization, I have the following:

(I'm rounding at category level so forgive me when they don't add up to 14k)

Housing $5,040
Utilities and Comm. $545
Cash - $2,985 (explanation below)
Medical/Dental/Pharmacy $275
Food and Drink: $590
Entertainment $1,325
Travel - $1,420
Consumer Goods and Svcs $1,170
Gifts - $215
Misc: - $390


Some detail (again forgive the rounding):

Housing - 5,040
4k of that 5k is mortgage (I've always rounded up to the nearest grand, I think the actual pmt due is ~ 3500).
$590 is condo fees. This pays water, heat, some building maintenance.
$175 is insurance (homeowners + a policy for an expensive piano)
$275 is repair - this has been an expensive year - new compressor for AC and new dishwasher

Utilities and Comm:
210 gas&elec
75 - home phone
75 - internet
185 - cell phones

Cash: 2,985THis is a bogus category and an obvious flaw in my system. I don't track where my cash goes. This is just money from the atm. Most is probably food and drink or entertainment, lots also in transportation (i can spend 6-700/mo on taxis)


Medical/Dental/Pharmacy $275
Optical 125
Medical and Dental 60
Pharmacy - 90 (much of this is health&beauty stuff, things most people would buy in a grocery store)

Food and Drink: $590
Grocery: $370 (we spend much more than this - but it goes out as cash)
Wine and Liquor: $220

Entertainment $1,325
Restaurant/Bar: 720
Gym: 120
Piano lessons: 170
Newspapers and Mag: 135
'other' 180


Travel - $1,420
We also are very liberal with our travel budget. We did 10 days in India in the spring. I went to Miami for a bachelor party. My wife and I spent a weekend in Mexico in June (I had to go for work anyway). We did a weekend in Milan in July. There was a weekend trip to Chicago for a wedding in September. The wife joined me in London for a week in October (I was there anyway for work). Two weeks ago I did a short Vegas trip with some old buddies. This weekend we're making a quick trip to Boston - we'll be gone a little less than 48 hours, it'll cost probably a thousand bucks all in. Over xmas/new years we're going back to Mexico - searching for ER locales.

And this was a light travel year for us.

Consumer Goods and Svcs (retail) $1,170
Electronics: 90
Books and Music: 200
Household and Kitchen: 50
Clothing: 625
Office/Art suplies: 140
Computer non-HW 15
Hair/other svcs 50


Gifts - $215
No further breakdown here

Misc: - $390
Public Transport - 100
Charities 270
other - 20



Wow. Thank god for internet anonymity!


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.
__________________
Money's just something you need in case you don't die tomorrow.
Maurice is offline   Reply With Quote
Old 11-16-2007, 11:50 AM   #17
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,032
Quote:
Originally Posted by donheff View Post
No real budget. We have a list of estimated expenses. Then add a liberal vacation allotment and a big miscellaneous allotment. That constitutes our yearly spending plan. If we underspend the excess will go into a "mad money" account to be tapped when we get a wild hair up our a** or in bad times.

That sounds like my method !
__________________
Moemg is offline   Reply With Quote
Old 11-16-2007, 12:15 PM   #18
Recycles dryer sheets
 
Join Date: Jul 2007
Posts: 63
I've tried to keep a budget, just to 'confirm' where the money goes, but never see it through. Instead I estimate yearly inputs and expenses for various categories based on the previous year and accounting for inflation and major changes. I too have a large miscellaneous allotment which is the part I'd like to get a better handle on now that I'm moving into FIRE.
__________________
Getting short is offline   Reply With Quote
Old 11-16-2007, 03:05 PM   #19
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
We keep a "strict" budget using Quicken in sort of a custom "envelope" method. We've been doing it for about 25 years now. The whole idea of keeping a budget is to spend as much as possible (!!!), without getting into a cash crunch when you suddenly need to cover a big expense. We have been able to save for cars and pay cash when we buy them, for example.

With a comfortable budget in place that accounts for retirement savings and large "unexpected" expenses, we can spend the rest guilt free.

We also split the budget money between DW, myself the kids, and common expenses. So DW and I have our own money and don't have to ask permission to buy some expensive toy for ourselves.

Now actually, my DW and I end up saving most of that spare cash, so maybe that careful budgeting is somewhat wasted. We're going to have that problem with trying to turn saving in pre-retirement to spending in post retirement. I may have to buy a Ferrari just before I go into the nursing home just to make sure it's all spent. And DW has saved more than me! So we don't have a big problem with budget disipline. In the early days if there was a problem it was usually fixed with a simple reallocation between goals or dedicating raises to the problem area. DW and I were in agreement on balancing current and future spending, so we didn't have any big problems.

I'd be pretty nervous without a budget.

Dan
__________________
Animorph is offline   Reply With Quote
Old 11-16-2007, 04:07 PM   #20
Moderator
Ronstar's Avatar
 
Join Date: Aug 2007
Location: A little ways southwest of Chicago
Posts: 9,343
No budget here yet, but use Quicken to track expenses in order to prepare future budget when I fully ER.
__________________

__________________
Ronstar is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Financial Myth (i stole this from another financial forum). please, don't sue me. Enuff2Eat FIRE and Money 20 08-19-2007 04:26 PM
Financial Advice for Friends and Family - How to handle it? chinaco FIRE and Money 22 03-19-2007 02:06 PM
Do your family members listen to your financial advice? JustCurious FIRE and Money 63 02-08-2007 11:22 PM
charitable family foundations--family first! astromeria Other topics 4 09-25-2006 10:49 PM
I need a budget... LRAO FIRE and Money 30 11-26-2005 12:28 PM

 

 
All times are GMT -6. The time now is 06:44 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.