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View Poll Results: How do you budget?
Strict itemized budget 52 18.37%
Loosely defined budget 85 30.04%
Pay myself first 17 6.01%
No budget 112 39.58%
Other (please explain) 17 6.01%
Voters: 283. You may not vote on this poll

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Old 11-02-2019, 11:10 AM   #41
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When working, always paid myself first--meaning contributions to savings was automatically out before the rest went into checking for living expenses.
I kept track of what we spent in general categories and mentally knew how much was available each month. We always had enough to get to the end of the month, and frequently a little extra.
Now, we know what our monthly "spend" is, and thats what goes to the checking account.

I also track expenditures monthly.
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Old 11-02-2019, 11:18 AM   #42
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I selected 'loosely'. On any purchase over $1000 I question myself. I periodically think about monthly expenditures and see if I can reduce. Luxury items are not my style.
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Old 11-02-2019, 11:26 AM   #43
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We don't really have a budget but do have "pots" of money that is funded for things like travel, home repair, etc. Still watch the grocery ads for deals even though it wouldn't really matter to the bottom line much.


So I had to put "no budget"
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Old 11-02-2019, 11:58 AM   #44
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DW would ask,"What's a budget?"
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Old 11-02-2019, 01:17 PM   #45
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YNAB
??
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Old 11-02-2019, 04:11 PM   #46
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I have a budget work sheet in my xls. But the current year budget is nothing but tracking the max of previous years spending by the categories.

I do generate retirement budget (2023) based on current one.

So let’s call it long term budget.
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Old 11-02-2019, 05:09 PM   #47
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All our income goes into one checking account. I balance it monthly and record the total debits/credits. The spreadsheet calculates my average spending, and the estimated spending for the year. It then adds it up with IRA's, taxable spending, and checking. With that number I forecast total spending and saving for the next 25 years. I use a 4% inflation rate and for COLA pensions I use .04% less than inflation. I don't think chain inflation as used by SS accounts for total inflation. These numbers are arbitrary, and I would welcome any comments. Oh, and the spreadsheet allows me to enter bulk spending i.e. replace a car, roof, travel, etc. in any given year.

I look at the forecast, pay particular attention of the next 5 years, a little less at 10 years, and see what the kids are going to get 15-25 years. Bottom line, as long as it looks good we don't change our lifestyle or spending habits. Heck, it took up 75 years to perfect it, why change as long as the money last.
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Old 11-02-2019, 05:47 PM   #48
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What is this this budget thing anyway? I always spent little, seems since retirement each year I have more $. Time to start blowing dough.
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Old 11-02-2019, 06:07 PM   #49
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Quote:
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Quote:
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YNAB
??
https://www.youneedabudget.com/

You can try it out for free, IIRC.
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Old 11-02-2019, 07:24 PM   #50
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I budgeted closely when cash flow was tighter (income lower) such as first few work.years. We had some built-in frugality (never running credit card debt or borrowing for cars) which requires saving for replacement vehicles and major purchases.

Then once we had saved a good bit we found just continuing those good habits and LBYM eliminated the need for detailed budgeting. In some ways the "budgeting" was just structuring our lives so we could max out retirement plans, pay cash for major purchases, etc.

So now FIRED, I track expenses but do not do a firm budget. Don't need to.
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Old 11-02-2019, 08:13 PM   #51
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Our budgeting process changed as our financial situation changed.

When we first decided to get hold of our spending and deliberately become LBYMers and savers, we kept a strict line item budget across perhaps 20 categories. That was the only way we could start discipline in our spending. We made lifestyle changes to accommodate the budget.

As we became better at saving and LBYM, we loosened to more of a general budget, focusing on the categories of largest controllable expenditures. We also became better in knowing when infrequent expenditures might hit (e.g. getting new major appliances), saving for them, and factoring that into the budget.

When our income increased, if we increased our budget, it was at a much lower percent that the increased income percent. Also, my job usually had a bonus component; we never budgeted based on potential bonuses, only on my base salary. That way, when I did get a bonus, we could frivolously enjoy some of it (if we had sometime in mind) and save some of it.

When it was clear that we had LBYM under control, and were saving at a very high rate (due to both controlling expenses and increased income), we moved to more of a "savings rate" budget - that is, we started with an amount that we wanted to save/invest (with FIRE in mind), and just monitored overall expenses to achieve that savings rate.

Now that I am retired and no longer in the accumulation phase, we have a "cash flow" budget. Based on our planned expenses I budget the required SWR from our cash, and track how we are measuring against it. Since we have a comfortable retirement it is not so much to be strict, but just to ensure we are not going wildly overboard when we choose to "blow that dough".
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Old 11-02-2019, 08:18 PM   #52
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Similar to what several others have said:
I have never done a budget because I always did LBYM. I would periodically look back at what my expenses had been for a given time (usually on an annual basis), and if I got the sense that I wasn't increasing my savings as fast as I expected, I would try to figure out why, but typically I never had to change any spending habits because I am frugal by nature. When I was getting ready to retire, I went back and looked at my categories & amounts of expenses over the previous 2-3 years in order to project my expenses forward (and make adjustments for retirement) for Firecalc.

The biggest difference / change with me is, now that I'm retired, I'm taking about 1 week-long vacation per month, so my travel expenses are through the roof compared to when I was working. I tried to account for this when I was projecting my retirement expenses. I'm coming up on one full calendar year retired. At the end of the year, I will pull my financial data and see how my actual expenses this year compared to what I projected. If I find that my spending was far higher than anticipated, then before I get in trouble with a too-high withdrawal rate spanning multiple years, I suppose I would have to choose between cutting back / being more efficient on the travel expenses or getting a part-time job. But my impression (based on how much money I'm pulling out of my investment accounts to cover my spending during the year) is that I'm doing okay. Thus I'm still not doing a budget but I am looking at my expenses in hindsight to make sure my retirement lifestyle isn't breaking the bank.
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Old 11-02-2019, 08:45 PM   #53
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When we were both working, we struggled with this a bit. Like OP, we "paid ourselves first." But my goal was to maximize saving beyond that. We tried different approaches to budgeting, but with both of us working and two kids, there was no patience for anything too onerous or time-consuming.

Eventually, I just settled into a routine of tracking monthly spend by category in a spreadsheet. If something was getting high relative to recent history, DW and I discussed it. We either agreed to work on reducing it or just accepted it as a new baseline, usually the latter. The kicker for us was that as our income grew over the years, most of it went to increased savings rather than lifestyle creep. We did increase spending a bit here and there but at a significantly lower rate of growth compared to income.

In retirement, I started off carefully tracking every penny by category, mainly just out of nervousness once the big paycheck stopped. But now, 6 years later, I just use Fidelity Full View to track actual spending, which requires no effort on my part except scrolling through to validate. I don't use the budgeting function at all and I pay little attention to categories. Main concern is whether total spend is on-track for the year. Monthly trends are meaningless as some of our biggest expenses like property taxes and insurance are paid once a year and the timing of discretionary spend is highly irregular.

Our base, non-discretionary spending is very stable and seldom requires any discussion or action. For discretionary, DW and I start off each year deciding how to use these funds, which are roughly one-third of total spend. Some years we travel a lot. Some years see lots of home improvements. Some years include a new car, furniture, hobby toys, etc. We have a total annual spending target and we just adjust the discretionary plan to land somewhere in that neighborhood. That's about as close as we get to any kind of actual budgeting.
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Old 11-02-2019, 08:50 PM   #54
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No budget just LBYM.
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Old 11-03-2019, 09:42 AM   #55
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Strict budget here. Well, technically two budgets, but I’ll get into that later. I took the best parts of YNAB 1.0, Quicken, and my custom Excel spreadsheet, and created a retirement budget tool that tracks monthly spend on a per-category basis - carrying over various category balances month-to-month. DW and I each get our monthly individual, non-tracked spend, then the shared categories get the rest. So, we each have the freedom to spend our individual cash in an untracked manner on whatever we want. For shared expenses, whether it’s the car replacement fund, medical insurance, cell phones, property tax, Christmas, travel, whatever...everything has a category, planned due-date, and a monthly contribution.

Why two budgets? One is my allowed and anticipated spend. The other is my SHTF budget that DW and I discuss and agreed upon yearly during our financial review...just in case of some sort of black swan event. It drops our current spend by 20% by reducing non-essential items (i.e. travel, dining out, extending car replacement schedules, cutting Netflix/Spotify, etc.). And no, we won’t have to live in a cardboard box or eat dog food.

I’ve been retired for 2 years now. I may back off on the budget restrictions in a few years, but for now, it’s just who I am.
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Old 11-03-2019, 04:51 PM   #56
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https://www.youneedabudget.com/



You can try it out for free, IIRC.


Thanks for the assist, W2R. YNAB (You Need A Budget) is a popular, user-friendly app with lots of education support online. I’ve been using it for about 7 years and think highly of the product. Using it has saved us thousands and the control of our money is priceless. I actually look forward to opening it up everyday and assigning the latest auto-transferred checking account transactions into their appropriate categories, per their “give every dollar a job” approach.
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Old 11-03-2019, 04:54 PM   #57
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I budget using software and selected strict.
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Old 11-03-2019, 05:13 PM   #58
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When working and in the accumulation phase it was always 'pay myself first'..... Budget included maxed 401k as well as 529 contributions up front, and all the other expenses came out after. By... that got me used to living on a lot less than most of my coworkers... (but I retired younger than them.) I tracked my expenses so I had a good idea of what I'd spent in each category the previous year.

Now that I'm in the withdrawal phase (retired) I don't 'pay myself first' because I'm pulling OUT Of savings. But like others have said - I have a good idea of what the coming year spending will be, and use that for planned spending for the coming year. If we have a bigger vacation planned, then I adjust the budget to account for that. If we have a change in household status (like older son living in a dorm = noticeably less groceries) I adjust the plan for that.

I spend what I want... but if we spend more than planned I tend to pull back the spending in other areas to account for it. For example this summer's trip to Italy was more expensive than I'd budgeted... so we postponed some of our discretionary spending for about 6 weeks. It's all good.
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Old 11-04-2019, 09:57 AM   #59
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We stick to a yearly budget with inflation added. Around 30 years ago I started "funding" every fixed expense a year in advance so that when the bill arrived we had the entire amount to pay set aside. I keep a balance sheet and now I'm 5 years ahead. I realize others can't do this; it was difficult to implement. We went 2 years not buying anything but necessities in order to do it.
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Old 11-04-2019, 02:00 PM   #60
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We have a fairly strict budget but do spend outside of it when it's important to us. That's what our savings is for.
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