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Old 07-16-2013, 06:54 PM   #21
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Another (very gross) way of capturing what you spend is as follows:

- Take gross income from ALL sources for the year. (Pay, rental, dividends, investment withdrawals, ....any income that hit your household)
- Deduct out money that was diverted TO savings and/or investments. (401k, investment contributions, etc.)
- Take the difference. That's what you spent. Sure some went to taxes, some to groceries, some to shelter.... but if it didn't go to savings/investment... (or increasing your checking account)... it's spent... it's an expense.

That's the spending budget I used (5 years worth of data) for my retirement plan. Then I adjusted for retirement spending needs (increased health care, no SS or Medicare tax, increased travel.)

If the spent money is higher than you thought - time to get more details and figure out what you can whittle - or why it's bigger. (Like one time big expenses.)
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Old 07-16-2013, 07:15 PM   #22
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We've used Quicken for over 10 years and I'm relatively pleased with its user interface. Once in a while I get frustrated when I can't get it to do what I want (special reports for instance) but then I slow down, read the help guide and settle in on a solution.

I'm sure there are other software choices. Excel to me is great for some things but I would not use it to track expenses. That's just me. I don't want to bother making equations, if statements, create charts, etc. when Quicken and other tools have all this build-in for $60 or less.

I track a wide variety of categories that are useful for DW and me. For us, toilet paper is not a grocery. Ice cream is not a grocery. Beer is not a grocery. Prescriptions are not a grocery. Even though all of these are typically purchased at a grocery store.

Good luck with your tracking. I find the exercise very useful and I hope you will too. I think it's a life-long hobby at this point.
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Old 07-16-2013, 07:39 PM   #23
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I use Yodlee and it imports my expenses. For the most part, Yodlee puts my expenses in the categories I want. In addition, Yodlee tracks my investment accounts ultimately showing net worth. For my purposes, it has been easy to use, since it is seamlessly aligned with all of my accounts. Some folks here are concerned with having this much information on line. I am using keepass to protect my passwords. I am sure I have added some risk by using this more convenient approach but have elected to take that risk to allow me to track my income and expense almost without any input from me.
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Old 07-16-2013, 07:39 PM   #24
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We are in the "Tracker" camp. I started about 4 years before retirement because I wanted to know exactly how much it cost us to live. I also wanted an idea of how much was really necessary spending and how much was discretionary. I used Quicken for a long time, but switched to YNAB (previously mentioned) because I wanted a better budgeting tool.

Now I know, pretty much to the dollar, where the money goes. I also can see trends which helps with forecasting. I can also tell DH with confidence, "We can afford it" when contemplating such luxuries as an expensive trip. We are in our 5th year of retirement and I plan to continue. It's become a habit now.
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Old 07-16-2013, 08:22 PM   #25
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I'm in the tracking camp. But I don't go pouring over the details.

Instead I use the tracking as a guide for the year to keep myself honest.
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Old 07-16-2013, 08:46 PM   #26
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Another in the YNAB camp. I only use it for expense tracking now in retirement. I have five years of data. Each month I add the breakdown to an Excel spreadsheet for each year. I input the transactions as there aren't that many. And that allows me to see actual spending that hasn't cleared yet. This allows me to monitor the account we use for 90% of our monthly expenses. That account gives a 1% rebate that goes against our mortgage principle.
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Old 07-16-2013, 09:08 PM   #27
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Back in the days of yore before Excel, when bits of data stored on disk drives were chiseled on by very tiny people, I used VisiCalc and then Lotus 1-2-3 for budgeting, before switching over to Quicken in 1997. I still use spreadsheets (both Excel and 1-2-3) as an adjunct to do more detailed analysis of data I export from Quicken. So both tools I find useful.

I dont' know how detailed my expense tracking is, but I spend maybe an hour a week putting spending data into Quicken and validating/confirming data imported from credit card accounts (where they assign a category to the expenditure that I can choose to adjust). We track around 50 income/expense categories to give us an idea of what our spending may look like come ER time and where adjustments are more likely. This month we are doing another "living on planned ER income" experiment and use a spreadsheet to track every expenditure against our ER budget to determine what exposures we might have and figure out the best way to address them.
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Old 07-16-2013, 09:09 PM   #28
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I've used excel since 99 or so, just a little custom spreadsheet that I made quite a while ago. I like going over my purchases once a month and making sure there aren't charges there that I didn't make or an annual payment that I forgot about.

I tried switching to quicken, but had problems when my credit card payments looked like extra spending. I guess I should spend some more time on it, cause the monthly data entry does get kinda tiring.
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Old 07-16-2013, 10:05 PM   #29
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Originally Posted by jollystomper View Post
Back in the days of yore before Excel, when bits of data stored on disk drives were chiseled on by very tiny people, I used VisiCalc and then Lotus 1-2-3 .....
You missed MultiPlan between VisiCalc and Lotus 1-2-3. My first disk drive was on a TRS-80 - a 9" disk.
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Old 07-17-2013, 03:03 AM   #30
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Part of this depends on whether you are interested in just knowing where your money went or whether you are trying to create a budget to help control where it goes in the future.

Some people are natural LBYMers and don't actually need a budget for planning. Without conscious budgeting they spend less than they have and save adequately. I admire those who can do that --- but it isn't me.

Originally I used Microsoft Money - which is functionally similar to Quicken (I used Quicken for awhile also). Money and Quicken were both great at telling me where my money went. They also had a budgeting function but they weren't so good at actually helping me to stick to the budget. That is, if I budgeted to spend $500 for X during the month and I ended up spending $600, it was sort of so what. I would see that at the end of the month but it didn't really help me - in the moment - with what I actually spent.

Then I switched to YNAB. The concept with YNAB was to budget each month to zero - that doesn't mean (I hasten to add) that you have to spend all of your money each month. Part of budgeting to zero is putting money into savings or setting aside money for categories where the money is spent later in the year (such as real estate taxes). And, I found that as I spent money during the money the budget and spending would update. If I recorded spending more in a category than what was budgeted for that category, YNAB would immediately tell me that I was no longer budgeted to zero for the month I was budgeted to go below zero. So, I would immediately have to find a solution which would usually be to tweak the budget. That is, I could spend $100 more in this category this month...so long as I cut $100 from some other category(ies).

I found that using this type of budgeting program for the first time really made a huge difference in helping me to stay on track for what I had planned to spend.
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Old 07-17-2013, 05:58 AM   #31
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I use excel. I download csv files from checking and credit card and put in a master worksheet that checks balances vs statements. Then I copy a month's worth of data from there into a separate sheet for each month and categorize manually. A monthly summary sheet is automatically created from these individual sheets. The only manual data entry I do is the categorization.

Its not really budgeting - just tracking expenses. I've used this method for several years and it works well for me.
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Old 07-18-2013, 04:26 PM   #32
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I personally use Excel because I like to tweak stuff by myself, and because I'm very familiar with it, but yeah, entering data is a rather cumbersome process. I update my trackers every 3 or 4 months, when I feel like it... I probably should try playing with Quicken or equivalent, and simplify my life...

I would NOT trust anything in the cloud with all my credentials to go access my life-critical financial accounts though... I am usually NOT paranoid at all about Internet, entering credit card info, etc, but here the risk seems just too high. Just one bad guy can so easily screw you for life with a few clicks.

Now, something more important than the tool... Those rough formulas to derive the income you need during ER from your current net income... Man, they are just so awfully coarse... It totally depends on your personal circumstances... Totally... And any coarse model you might develop based on your 'gut feeling' is likely to be quite flawed as well... Been there, done it...

So I'd suggest you do yourself a favor, do track your expenses in detail for a couple of years, then ponder how the average expense per category will change during your ER... This will be so eye-opening for you, I guarantee...
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Old 07-18-2013, 06:38 PM   #33
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Now, something more important than the tool... Those rough formulas to derive the income you need during ER from your current net income... Man, they are just so awfully coarse... It totally depends on your personal circumstances... Totally... And any coarse model you might develop based on your 'gut feeling' is likely to be quite flawed as well... Been there, done it...

So I'd suggest you do yourself a favor, do track your expenses in detail for a couple of years, then ponder how the average expense per category will change during your ER... This will be so eye-opening for you, I guarantee...
+1

I think the reason more people don't retire early is they don't understand where there money goes (while they're working) so they can't estimate (even if it's a coarse estimate) how much they'll spend when they don't work. Many of our categories have remained the same. Some, like travel related items, have increased but others have decreased. All in all our estimates were reasonably close - at least close enough that we can adjust a little now that we're ER'd.
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Old 07-18-2013, 08:18 PM   #34
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Does anyone have any experience or opinion on Simple Planning.com Excel based program?
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Old 07-19-2013, 12:54 PM   #35
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I too, have drunk the YNAB Kool-Aid.

I've tried every other option mentioned here. All have their benefits, but for straight up budgeting - there's something about the "YNAB way" that clicked with us. It's made a huge difference in how we view and utilize our finances.

One of the nicest features for us, is the cloud option via Dropbox. DW and I can instantly see via either of our phones or computers the same info, essentially in real-time.

There were certainly some negative perceptions I had at first, that seem to be common with many. First - no direct import function. If you want to suck in data from your financial institution(s) on a regular basis, you'll have to export, then import. This was the biggest hurdle for me, as I've used that option in every other tool previously. At first, it seems like a glaring omission.

However, in our case - it turned out to be a blessing, and the lack of this feature seems to be by design. YNAB makes entering expenses on the fly incredibly easy - takes seconds per purchase via the Android app. And, doing so each time a purchase is made shows instantly where you are for the month's budget in the category you are using. For us, this instant focus on where our cash is about to go has proved invaluable in keeping on track with spending/saving goals.

Another tip...many people attempt to do a mass dump from their financial institutions, importing the data into YNAB thinking this makes a good starting point. For various reasons, this can be frustrating...and like many others who have gone this route, I abandoned it and simply started from scratch with current account balances.

Whether the YNAB model works well for you is likely based on many factors, but it's certainly worth a try. Everything is free for 30 days, and based on conversations I've had with the company - they'll extend that demo period should you wish more time to make up your mind. I used it in parallel with my previous methods (Mint and Quicken) for a couple months, but once I started seeing the positive results - I abandoned the other products and now use it exclusively for budgeting.
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Old 07-19-2013, 01:04 PM   #36
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I too, have drunk the YNAB Kool-Aid.
YNAB is a great budgeting tool. However I took advantage of the free trial of YNAB, and discovered that there is a huge difference between tracking spending and then cutting back if need be, and actually following a budget.

What I wanted, it turned out, was to track spending and I wanted nothing to do with budgets. Understandably I found YNAB to be useless for my purposes, but it is apparently excellent for budgets.
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Old 07-19-2013, 05:38 PM   #37
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...I also like to have my portfolio value up-to-date along with my expenses, without having to do anything more than to hit "Update"....
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It's just as painless to know how much I have received in dividends and interest, all summed up from 22 different investment accounts...
+++

Twenty-two (22) different investment accounts? Are you sure?
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Old 07-19-2013, 06:50 PM   #38
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I use Excel. I think it is probably useful to track your expenses closely for 3-4 months just to see what is really happening with your money. After that it is probably not so important as long as your spending habit remain the same. Also, don't forget the intermittent expenses that occur 1x, 2x, 4x per year like license renewals and insurance premiums. Similarly special occasion expenses like Thanksgiving.

Estimating and tracking some expenses help me decide whether I could retire. Continuing to do it helps me know whether I can live within a tighter budget (I can). It can also make you aware of where and how much you can cut back in an emergency.

I try to spend as much as possible on credit and debit cards so I can refer to the electronic records.
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Old 07-19-2013, 07:03 PM   #39
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We use Mint.com to track spending.

I set up my Dad with it and he's now using the budgeting feature and finds it very helpful. It's the first time in his life he's ever paid that much attention to his spending. It's been a very good thing for him.
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Old 07-19-2013, 07:09 PM   #40
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Twenty-two (22) different investment accounts? Are you sure?
Oh, hi there!

You made me bring up the Quicken screen to double check, as I could be miscounting them.

Yes, 22, although one is an account that has just been transferred out to another brokerage, and in the process of being closed. So, 21.

When we are talking about 2 IRAs + Roth + 401k's + Treasury Direct + brokerage accounts, etc..., then times 2 for a couple, then add to those the ESA accounts for the children that still have some money left in them, 21 is the magic number.

But the above are what I call investment accounts, because Quicken also helps me track my checking account (only 1 here), our American Express, Visa card, Discover, etc... So, the total is 27 accounts that Quicken keeps track of for me, although for the 2 Treasury Directs I need to do manual entry of the monthly interests.

I have been thinking about consolidating, and perhaps I will some day, but when these greedy guys charge as much as $100 to close an account it makes this guy thinks twice about it.
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