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View Poll Results: How many years did you carefully track expenses before retiring ?
none 21 14.19%
0 - 1 year 8 5.41%
1 - 2 years 16 10.81%
2 - 3 years 19 12.84%
3 - 4 years 9 6.08%
4 years or more 75 50.68%
Voters: 148. You may not vote on this poll

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Old 01-11-2014, 11:31 PM   #41
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I have observed that over the last 3 years, our non-recurring and unplanned expenses have run around $10K/yr easily. Examples include home and car maintenance, health expenses, etc... Nothing alarming at this point, but we do end up spending more than we thought.
My budget for these 'accrual' type / lumpy expenses is 11k / year so your 10k makes sense to me.
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Old 01-12-2014, 05:16 AM   #42
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I hate quicken. I downloaded data from the CC companies and my bank for 2 years and ran the numbers. Then I added in fudge factors for mainenance costs that didn't occur (e.g. roof, appliances, car purchases, large medical costs), then I added big fudge factors for extra travel and miscellaneous expenses.
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Old 01-12-2014, 06:50 AM   #43
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For me, about 20 years in Quicken. Of course I wasn't tracking for the purpose of preparing for ER 20 years ago, but when I wanted to assure myself of the numbers, I had 20 years of data to look back at.

I spent about 12 months analyzing the data before making the final decision to quit my job though.
Same here. Had tracked expenses since late 80s when we got Quicken, so had have amount of data at my fingertips.
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Old 01-12-2014, 07:27 AM   #44
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I never tracked expenses in detail until a couple of years prior to retirement in 2001. However, I always monitored our cash flow, so I knew we were taking in more than we were spending. Since we were pretty frugal, the details didn't matter too much. Quicken just allowed me to demonstrate to DW, that I could retire at 55.

The most important reason for tracking now, is to be able to manage taxes. I don't like to owe a lot on April 15, neither do I want the IRS to have a lot more of my money than they need. Also, as manager of my investments, it helps me keep track of the cost basis of things from prior to my relationship with Schwab.

I do look a lot at our expenses historically so as to think about what they are likely to be and plan to have the cash on hand as needed. I also like that graph you get when Quicken opens that lets you see historically how your net worth has grown over time. That, is very motivating.
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Old 01-12-2014, 07:27 AM   #45
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We're (hopefully) about a year out from ER so have been doing some analysis, hoping to dig a bit deeper than the really general TakeHomePay - PreTaxHealthInsurance formula had been using to know what we spend every month.

I don't think will ever get to the level of detail some others in here do by using Quicken or journals, but can get pretty good idea since we use credit cards for most of our spending and they let you set up spending categories based on what the transaction name is.

So I can't be able to differentiate food from beer, household cleaning supplies or hygiene products since all come from same grocery store but I'm not sure I really care as I expect it to all be there same same in the budget when we retire. Same with trips to stores like Walmart, I'm forced to lump that into "misc spending" since it could have been socks, a fishing lure, whatever who knows.
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Old 01-12-2014, 07:42 AM   #46
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For many years I dutifully tracked all of our expenses in Quicken (except for misc. cash expenditures). Raising a family created lots of new items and some to be dropped. It was an exercise in understanding where money went rather than trying to precisely budget future expenses.

DW used to roll her eyes back in her head when I attempted to sit down with here and go over each line item. So I just threw in the towel on that task.

Life is too variable to try to live to a strict budget, especially when raising a family. Now, with the kids out of the nest, we just watch our spending and live frugally as we can and still try to enjoy life.

One thing I learned about 20 years of detailed Quicken data is that no one, including me, wants to look at it, or, if they do, can't make any sense out of it since it is based on a somewhat previous life and set of circumstances.
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Old 01-12-2014, 08:20 AM   #47
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wow, an inverse bell curve is not a common poll result
Thats the sign of a bad poll. The choices should be more like
1) Didnt track expenses
2) 0-3 yrs
3) Between 3 and 6 yrs
4) Between 6 and 10 yrs
5) More than 10 yrs
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Old 01-12-2014, 08:35 AM   #48
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I did not track expenses at all prior to retirement. Our ER involved moving to Mexico though so there was a great deal of research and estimating what our expenses would be after the move. Been here going on eight months now and have been tracking virtually every peso spent. We're comfortably under our projected budget so things are looking good so far. Will keep tracking expenses carefully for at least a couple of years to be sure.
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Old 01-12-2014, 08:47 AM   #49
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We didn't track expenses at all before retirement but we knew what we were spending and didn't expect any major changes. And because I have a COLA'd pension I wasn't too concerned about inflation. Actually when I retired the net income increased slightly because I was maxed out on the deferred compensation (similar to 401k) and I was no longer paying into the retirement system or SS. I brown-bagged lunches so that was a wash. Commuting costs weren't an issue because I had an employer-furnished car. (I do miss that one - "Say, I think it needs a new set of tires, can you look at that? Thanks.")
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Old 01-12-2014, 09:05 AM   #50
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We bought a ledger (i.e. a book with columnar pages, for the younger posters) soon after we were married in 1970. So we tracked expenses for 36 years before I retired.

When we got the first computer, I moved my recording to Quicken, DW stayed with paper.

The questions weren't about retirement, of course. But it felt good to have some data for the "can we afford a more expensive apartment?" then "can we afford a house?" then "what can we handle for kid's college?"
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Old 01-12-2014, 09:31 AM   #51
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I downloaded a budget/expense Excel template from Microsoft's template library and slowly but surely customized it for myself. I entered data and maintained it for 2.5 years prior to giving my 6 week notice.
I despise spreadsheets, but I knew I had to bear down and get a handle on what my current (preFIRE) and projected (postFIRE) basic expenses would be.
I knew I had 7 years to go until I could draw my own deferred FERS pension. Since 2007 when I FIREd, I have been living on a modest CSRS survivor pension and my TSP account converted into an immediate fixed annuity earning 5.25%.
I assumed several things would go wrong (replace a car, furnace died, market went south, inflation went berserk, etc) and ran some what-if scenarios. I did have to replace a car last fall, and it did not dent my budget a bit.
I can apply for my deferred pension, eligible to collect in Sept 2014 under FERS MRA+10 rules.
Then the real party begins....wooooooo

Every 2 years, I go back and update the spreadsheet data. I'd rather eat liver but it has to be done.
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Old 01-12-2014, 09:54 AM   #52
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For me, about 20 years in Quicken. Of course I wasn't tracking for the purpose of preparing for ER 20 years ago, but when I wanted to assure myself of the numbers, I had 20 years of data to look back at.

I spent about 12 months analyzing the data before making the final decision to quit my job though.
Same here. Over 20 years of Quicken data, but I only really analyzed the 5-7 years prior to retirement.
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Old 01-12-2014, 10:00 AM   #53
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I didn't track expenses much prior to retirement mainly because I knew that I was making my basic needs with my current take home pay. Once I retired I did start a spreadsheet to ensure I was staying within budget and to project next years expenses.
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Old 01-12-2014, 10:38 AM   #54
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As I look at my expenses as downloaded and presented by Quicken after the fact (just a click on "update all accounts" does it), I pay attention to the expenses over the trailing 12-months. That should catch any worrisome upward trend. If it stays below 3.5% WR, then party on.

What I like about using something like Quicken is that if I wonder how much I spent on any particular category such as fuel for my motorhome for last year, just a few clicks show me that. Same as other posters, I do not bother to break down amounts spent at Costco into food or toiletry or other sundry items. It's not something I would change whether I know or not, nor the biggest items to worry much about.
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Old 01-12-2014, 11:21 AM   #55
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I began keeping better track of my expenses back in 1989 when I first bought the co-op apartment I live in today. Back then, I did not own a PC so I used a piece of paper with columns for income and my major and easily trackable expenses, and one row for each month.

In the early 1990s, after I began investing in mutual funds in a taxable account, I created a summary sheet for my expenses and included categories for nonwage income while separating out the co-op expenses into taxes, interest, etc. which I already knew from the 1098 forms.

In 1995, I bought my first PC so I not only created spreadsheets for all the stuff I had been keeping track of on pencil and paper but created new spreadsheets which not only did calculations but also built up a database by putting all the years together side by side. I created a spreadsheet with a checkbook register linked to a skeleton version of income tax forms, a vital spreadsheet for my everyday use.

In 2001, when ER first appeared on my radar (I switched from working FT to PT), I created another key spreadsheet which looked forward as opposed to simply recording historical expense data. I began projecting income and expenses in a potential ER down the road. I eventually added a worksheet with projected SS benefits and a budget for my part-time working years into ER. This is a vital spreadsheet which replaced my back-of-the-envelope system I used for my monthly budgets in my FT working days.
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Old 01-12-2014, 11:25 AM   #56
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We started tracking expenses in detail about 10 years before retirement, using homegrown spreadsheets. I tried Quicken several times, never warmed up to it.

Fortunately DW and I are naturally LBYM and debt averse, so we've spent less than we made since before we married 34 years ago even though we didn't track expenses. We had loose budget figures in our heads, but we only occasionally sat down and tallied up what we were spending by expense category (every couple of years maybe).
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Old 01-12-2014, 11:48 AM   #57
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Here's another reason I want to track expenses, something we never did in our full-working years. I want to see what are truly discretionary expenses, vs what are essential. I do not want to fool myself that I can cut back in case of economic bad times if I really cannot.

So, perversely a lot of discretionary expenses is a good sign. Included in this category would be charity donations, gifts to family members, travel expenses, toys, extra cars, etc... I will even throw the expenses for the 2nd home in there.

And heck, if things get really really bad, even my main home can be let go. Who says that I need more than my little 8'x25' motorhome*? So, me worry?

* Well, DW does, actually.
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Old 01-12-2014, 11:53 AM   #58
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I've often wondered how much I've earned or spent in total over time. I would be curious to know whether you have kept a cumulative total, and in what ballpark it is.
Not really, mostly because of differences in software that I used. For the first several years I used Managing Your Money. After it went kaput, for years I kept that data and a copy of the program electronically, but I lost it when a hard drive and my back up went bad at the same time.

I do have a summary of expenditures by category from 1993 on with one year in the mid-2000s where I changed programs during the year and ended up losing some data and the data is incomplete. I have some underlying data from that time period but during that period I used Microsoft Money, Quicken, and YNAB at different times. I also used different versions of these programs not all of which is totally backward compatible so some of the data I have is not easily accessible. But it is interesting to look back at what I spent back then. I've never thought to look at the cumulative number.
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Old 01-12-2014, 01:15 PM   #59
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DW used to roll her eyes back in her head when I attempted to sit down with here and go over each line item. So I just threw in the towel on that task.
Same thing here. But the data built-up before the towel was thrown was the basis for the monthly transfer. She got budget responsibility for all the stuff she typically bought, including groceries and her cloths, among other things. The side effect? "Me: Oh, that IS a nice pair of boots (thinking: what does that make 12 pairs now?). What's for dinner? Her: Bologna sandwiches".

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Here's another reason I want to track expenses, something we never did in our full-working years. I want to see what are truly discretionary expenses, vs what are essential. I do not want to fool myself that I can cut back in case of economic bad times if I really cannot.
DW (and I, to some extent) actually do a rough "split category" when going to Super Walmart or the like, but only if it's something 'big'. As much as we spend on cars (10% of total spending [sans income tax]), I thought we should be able to punch in "essential", "social", etc on the dash for each trip and get that split, hehe.
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Old 01-12-2014, 08:23 PM   #60
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I want to see what are truly discretionary expenses, vs what are essential. I do not want to fool myself that I can cut back in case of economic bad times if I really cannot.
Man would that be a struggle staring at the word "beer" on the piece of paper...
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