Do you keep a budget?

[bank5]

I'm curious how people on here feel about budgets. Do you keep a budget for everything in general or do you break it down to specific categories like food, travel, hobbies, etc? Does anyone use a budget not for cutting back on spending, but to know when to pull the trigger on desired items? For example, "I'm $1,000 under budget this month so I can buy that new computer I've been wanting"

If you don't keep a budget, do you LBYM and simply try to minimize all expenses?

 

[73ss454]

I've been keeping track of expenses for the last 3 years. I seem to be a bit over every year from where I'd like to be but things keep coming up. I wanted to do the 95% rule this year but I've gone over so I took a PT job to help a bit. Now I can use the 70% rule. (heh)

I also keep track of all categories so I know where the money is going.

 

[Coach]

I do keep a budget, broken down into around a dozen categories. I really only use it for general monitoring of my spending. I'm just a few months into retirement, so I'm mostly interested in seeing how well my spending matches my expected spending.

Coach

 

[Bikerdude]

I'm curious how people on here feel about budgets. Do you keep a budget for everything in general or do you break it down to specific categories like food, travel, hobbies, etc? Does anyone use a budget not for cutting back on spending, but to know when to pull the trigger on desired items? For example, "I'm $1,000 under budget this month so I can buy that new computer I've been wanting"

If you don't keep a budget, do you LBYM and simply try to minimize all expenses?

I use a spreadsheet to track year to year expenses and budget based upon income and a 4% SWR. I track all known and planned expenses. I project a year in advance using a probable inflation rate. Because I'm independently middle class, I need to budget. Baring the unknown, I can project what I will spend within a couple hundred dollars in 2010.

 

[bbbamI]

I keep a spreadsheet with 31 different categories. I have a certain amount of money to work with for the year. I can take away money from one area and add it to another if there is a need. My budget spreadsheet is just as important as my investment tracking.

 

[Goonie]

I don't use a budget anymore. I know what my normal monthly expenses are, and how much I can just "blow" on whatever, and how much I like to put in my piggy bank for something like a new toy or some such thing.

During my working years I budgeted so that I'd eventually be able to afford to retire. It worked! Now that I'm retired, the structured budget is retired also, since I can now easily live within my means. Now it's my goal to enjoy what my nest-egg can buy until both I and it are gone!

I still kinda like the line from Stephen Pollan's book "Die Broke"..."The last check you write should be to the undertaker - and it should bounce!"

 

[CuppaJoe]

No, I don't keep no stinkin' budget. I'm on a fixed allowance from various sources. If too much money accumulates in my checking account, I don't do the monthly transfer from savings (bucket number one) and record that amount as a credit. Any big expenses will come out of that credit section. Is there a simpler way?

 

[F4mandolin]

I just finished the first two months of what will be a continuing budget track. I pulled a worksheet sample to use off the internet.....but after 2 months I have been slowing whacking little catagories off the excel worksheet. I think at the beginning of the year I will just keep track of maybe 5-6 catagories. I was curious on how much money I spend on "crap" food..which includes beer, sodas, candy, ice cream etc.....over $400 last month. I am still hoping to retire in just under 2 years at 54 with a goal of spending around $45k a year. With 2 summer months done we were $3500 in July and $3008 in Aug with a $725 home repair. Once school has started (oh God, it has) that should drop to around $2500. We are making NO adjustments to our spending just to see where we were at.....looking good. I think at the new year the budget will just have transportation, home, food, dinner, and likely an assorted heading to cover things I buy for school etc. I don't mind keeping track, but too many catagories was "doin me ead' in". And.......converting Pounds into Dollars as well...just too lazy to spend that much time on the catagories.

 

[bosco]

I keep a spreadsheet with 31 different categories. I have a certain amount of money to work with for the year. I can take away money from one area and add it to another if there is a need. My budget spreadsheet is just as important as my investment tracking.

same here. 38 categories.

 

[Budman]

My budget is 33 categories broken into descretionary expense (variable) and nondescretionary expense (fixed), by month with annual totals integrated into my investment forecast by year. Investment projections are graphed to age 94. I have an investment target at age 85 (the age my father and mother died) which I have decreed that I cannot fall below. Accordingly, if poor investment returns cause the graph to fall below target, then I adjust the budget descretionary expenses downward. About 50% is nondecretionary which is covered by fixed income sources. This is how I have applied the LBYM concept into my personal finances. My system gives me good control over costs. Anymore I just set her on autopilot and sail off into the sunset!

 

[Fireup2020]

No formal budget here either, but I know how much my regular "bills" are (including savings) and play with the rest (it's not much!) I review my overall spending by category a couple times a year (fluctuates of course - but not bad at all!)

 

[IndependentlyPoor]

Wow. I am impressed. We have never kept a budget, never even tried.

We download our credit card statements to Quicken so we do have a detailed record of our expenses from the time that cash-back schemes began and we started paying for everything with a credit card. Every now and then I use quicken reports to look at where our money goes.

 

[ls99]

No, never kept a budget.

 

[happy2bretired]

Yep, I keep a budget with about 24 categories, many with subcategories, in Quicken. I tweak it quite often, adding $$ to the categories I overspend in and subtracting $$ to those categories I under-spend. By the end of the year, it all balances out and I'm still within my yearly budget - just not completely within my original plan. I like the budget monitoring window in Quicken. I use the budget monitoring window and the budget window (both open at the same time) and tweak away until I'm satisfied.

 

[W2R]

I'm curious how people on here feel about budgets. Do you keep a budget for everything in general or do you break it down to specific categories like food, travel, hobbies, etc?

I guess you could say that I have a budget in retrospect. I have a general idea of what my spending goals are. Each month I tally up what I have spent in about two dozen categories. If I have been spending too much, then I look at where it went and go from there.

Does anyone use a budget not for cutting back on spending, but to know when to pull the trigger on desired items? For example, "I'm $1,000 under budget this month so I can buy that new computer I've been wanting"

Well, kind of? I might look at what I have been spending and say, "I had to spend $5,000 fixing up hurricane damage last month, and the month before I had that $1,500 in dental work and my TV broke so I bought a $2,000 TV... Maybe I'll just wait a few months before buying that new computer I've been wanting since my old one is still usable."

But I don't look at low spending months and say, "Oh goodie! I should figure out something to buy with all this extra money!"

If you don't keep a budget, do you LBYM and simply try to minimize all expenses?

Yes, I challenge myself to spend no more than $X/week on average. Every day I log into my bank accounts and figure out how I am doing on that. It makes me feel really happy when my spending is in line, and that motivates me to spend less.

I don't really minimize ALL expenses, because I need to feel like I can afford something meaningless and unnecessary now and then (like that $25 crystal ball). But I have a figure in mind as a maximum to spend on that sort of thing. If I am depressed and want to go buy a treat for myself, I think about how I am doing in reaching my goals. Sometimes that is enough to dissuade me from spending more, but sometimes not. People are human and at times I engage in shopping therapy when I am not doing that well in reaching my savings goals. But if I do, then I work harder at LBYM to make up for that.

To summarize: What works best for me is to have goals, rather than restrictions. Reaching goals makes me happy and that is positive reinforcement for LBYM'ing. Having a goal reminds me that I am doing this to make ME happy, not somebody else.

 

[FIREd]

We start with an overall budget goal for the year but we do not break it down into categories. Then, as we start spending, every transaction is recorded in Quicken. Every 2 months or so, we verify that we are on track to come under the overall budget goal for the year. At the end of June, we were slightly under budget so we allowed ourselves to spend a bit more. At the end of August, we were slightly over budget (after prepaying for travel plans for the end of the year), so we are being more careful until we can bring it back under budget.

 

[Animorph]

Definitely. 125 Quicken accounts, including assets and tracking accounts. Effectively 67 categories, including separate categories for DW and I as well as common. The primary goal is to optimize spending without eating into retirement savings.

 

[Bikerdude]

Budget

I allocate for and track the following:

Taxes

Utilities

Fuel oil

Charge cards

Cash

Home expenses

Auto expenses

Insurance

Medical

Dental

Vacations

One time special purchases

The above, when added in $$ = my pension + SS + SWR for the year.

 

[easysurfer]

Yes. I keep a budget with a software program.

For the budget, I average out the expense by month. For example, if my LTC policy costs $1200 and is paid full in one month, I'll put that as $100 per month on my budget. Also, I use a spreadsheet as a cheat-cheat to list out yearly non-recurring expenses along with the month they are due to avoid surprises when the reports on my budget of a month seem higher than normal.

This is my first full year of retirement and with my budget I see that I spent more on gas each month than I planned, I'll put a more accurate amount when I create my budget for next year.

 

[haha]

I don't keep a budget. I have detailed records going back over 20 years, first kept with a paper general ledger, later with a custom software GL, and now with MS Money. The general ledger was best, but it had no automatic downloads so I try to configure MS Money to do approx. the same thing.

I know right away where I am if my spending goes up in some way that I am not OK with.

Ha

 

[Alan]

I'm curious how people on here feel about budgets. Do you keep a budget for everything in general or do you break it down to specific categories like food, travel, hobbies, etc? Does anyone use a budget not for cutting back on spending, but to know when to pull the trigger on desired items? For example, "I'm $1,000 under budget this month so I can buy that new computer I've been wanting"

If you don't keep a budget, do you LBYM and simply try to minimize all expenses?

On occasion in the past I've done a line item budget, but the past few years I just make a few monthly entries in a spreadsheet to track how much we've spent (cc bills, plus outgoings from bank statement).

We try to minimize expenses to LBYM and save towards items we want to buy such as vacations, a car etc. (always had a car savings account and treat it as if we were paying a car note by auto-transferring money every month, and paying maintenance costs out of it, and then using it to replace the car when the mood takes us)

 

[LOL!]

We don't keep a budget per se, but we track expenses in MS Money. The categories CreditCard, the 5 or 6 online-bill-pay utilities and once-a-year things that we write checks for like property taxes. Almost all expenses go through CreditCard which is rather nebulous. We have gotten away from spending any cash because that's a non-trackable black-hole.

If the CreditCard bill is higher than the previous month, I look to see why. Usually it's something like auto_insurance or vacation_condo that makes it larger, so I don't give it a second thought.

We've never had to explicitly cut back on expenses such as fuel, groceries, eating out, so we just don't worry about it. MSMoney says we spent $14K less in the past 12 months than we did the 12 months before that. I'm not going to figure out why, but I think it's mostly from not eating out as much. There is usually an annual "What were your expenses" poll on this forum which is sometimes interesting.

 

[CyclingInvestor]

Never have. I naturally underspend. While I was working, I saved most of the excess. Now, I allow travel / entertainment spending to increase when non-IRA money piles up.

 

[JOHNNIE36]

My budgeting can be summed up in four words. RECEIVE BILLS-PAY BILLS.

 

[NW-Bound]

We don't keep a budget, though my wife keeps track of all expenses and bills to ensure accurate billing and no fraudulent charges. Years ago, I tried to set up MS Money to automate the accounting process, but found it a bit cumbersome after Windoz kept crashing on me due to other unrelated problems. So, my wife just set up her own Excel spreadsheet.

While she keeps records of the outflow, I spend my time tracking our investment portfolio, which is spread out over several accounts: 401Ks, IRAs, Roths, ERISAs, after-tax brokerages, money markets, I-bonds, etc... I use MS Money to give me the daily total amount on the bottom line.

We try to keep our basic expenses low, and will splurge on travels or toys during good years. So, the big discretionary expenses are decided based on the portfolio return.