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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 01-12-2014, 08:34 PM   #61
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Even in hard times, one can justify beer if he classifies it in the "food" category, so that it has a higher priority than soap or deodorant. Problem solved.
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Old 01-12-2014, 08:41 PM   #62
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Originally Posted by NW-Bound View Post
Even in hard times, one can justify beer if he classifies it in the "food" category, so that it has a higher priority than soap or deodorant. Problem solved.
And if you make it yourself, the ingredients are taxed at the lower food rate in IL (barley, oats, wheat - those are food). So sure, it is in the food category (Liquid Bread as the Monks called it).

edit/add - to address the OP, like some others I have never tracked expenses at the micro level. But I've been tracking at the macro level, which is EZ. We have only two accounts that bills are paid from, so I add up total withdraws, subtract anything that was a 'transfer' (IRA contributions, and things we bought for others and they paid us back) - that number is what we spent. And I add in any planned/amortized purchases (replacement cars, expected maintenance) - something that many fail to account for.

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Old 01-12-2014, 08:48 PM   #63
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I voted 1-2 years. I used a spreadsheet. Took the data and used it as a budget guide for the first few years of retirement. Most budgeting now is just reviewing the checking account balance a few times a month.
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Old 01-12-2014, 09:13 PM   #64
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I have never tracked expenses nor ever kept a budget.

But I do admire you folks who do. It must really be cool to see where all the monies go.
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Old 01-12-2014, 09:56 PM   #65
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I try to follow a budget for some variable monthly expenses now, like groceries, household and eating out.

I don't bother with the fixed expenses like health insurance premiums, because they are, well, more or less fixed. And things like medical are what they are. We don't go to the doctor more or less than we need to due to what is or is not left in the budget. We have pad in the budget if we have a high home repair or medical expense year.
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Old 01-13-2014, 04:58 AM   #66
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My CR provides a tracker called FinanceWorks. It categorizes transactions and charts them for you. It's usually pretty good at this although I sometimes have to manually categorize or re-categorize some transactions. It's very helpful and it's free to members.
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Old 01-13-2014, 06:47 AM   #67
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I started with loose leaf paper and pencil in the 80's, tracking spending, estimating income and taxes, etc. I bought my first computer in 1993 and have gradually built a truly glorious spreadsheet that makes it a lot easier and more fun.
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Old 01-13-2014, 09:51 AM   #68
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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.
+1

It's easy to say "We'd cut back somewhere". It's more useful to say "This is the list of things that we enjoy today, that add up to $XX,000, that we would live without."
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Old 01-13-2014, 10:35 AM   #69
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+1

It's easy to say "We'd cut back somewhere". It's more useful to say "This is the list of things that we enjoy today, that add up to $XX,000, that we would live without."
It's also useful in understanding the level of risk in the budget. If you have a lower discretionary expense level (as I do) then it might even make sense to do OMY to build a larger buffer.
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Old 01-13-2014, 10:44 AM   #70
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I knew our fixed expenses. Just went through the bank chequing account for ebill and Visa payments. Added them up. Added about 30 percent for variances and for travel that we intended to do.

Three years later we are, over that three year period of retirement, bang on our annual after tax budget.

We really do not/did not analyze it down to the last category/last dollar. Not interested in doing that. We are careful spenders who focus on value.
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Old 01-13-2014, 10:58 AM   #71
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We cut a boatload of expenses to semi-ER. It was wild how much we cut just by 100s of little things that knocked off us both working full time another decade - LED bulbs, drying racks, reducing paper towels and napkins, using Entertainment coupons, making our own natural cleaning supplies, getting a 2% cash back credit card, getting rid of the land line, negotiating the cable bill, changing grocery stores and just a bunch of little stuff that all added up.

We still live in the same house, drive the same cars, and have the same basic lifestyle - only a lot more free time. We just had to learn to spend our money more efficiently.

Every $100 a month cut meant needing $60K less in the nest egg over a 50 years retirement ($100 a month X 12 months a year X 50 years).
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Old 01-13-2014, 12:14 PM   #72
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I have never tracked expenses nor ever kept a budget.

But I do admire you folks who do. It must really be cool to see where all the monies go.
+1 on this. I tried a few times but thought it was wasting time I could do other stuff with. I just take out 3.5% and that seems to be enough to pay all the bills month after month.
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Old 01-14-2014, 10:21 AM   #73
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I've been tracking expenses for 25 years. For retirement purposes, I think 2 or 3 years would be sufficient.
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Old 01-16-2014, 12:06 PM   #74
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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.
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My budget for these 'accrual' type / lumpy expenses is 11k / year so your 10k makes sense to me.
I forgot to say that the above $10K/yr "occasional" expenses did not include the $10K/yr healthcare deductible that we exceed 3 years in a row. And that has been paid out of an HSA account that we had built up to $40K from years of perfect health. As I already counted the yearly HSA contributions as expenses, I kept this HSA account off my Quicken portfolio.

I consider that HSA prepaid healthcare expenses, which I will definitely tap in my later years. I could not believe I drew on it so soon. It's just to show that one can never know.
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Old 01-16-2014, 01:30 PM   #75
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I've tracked my expenses for more than a decade. Married again about two years ago and we have not co-mingled our assets yet. My DW and I are so similar in regards to finances that we each had almost equal assets and equal pay. I spent more each month this last year, but together, less than 6K / month. Budgeting for retirement 7.5K (taxes, more travel) + 2K / month health care which is high where we live and we both are in good health and no debt.
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Old 01-16-2014, 01:52 PM   #76
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I forgot to say that the above $10K/yr "occasional" expenses did not include the $10K/yr healthcare deductible that we exceed 3 years in a row. And that has been paid out of an HSA account that we had built up to $40K from years of perfect health. As I already counted the yearly HSA contributions as expenses, I kept this HSA account off my Quicken portfolio.

I consider that HSA prepaid healthcare expenses, which I will definitely tap in my later years. I could not believe I drew on it so soon. It's just to show that one can never know.
My budget includes hitting the family OOP maximum annually. Should I spend less the excess will go 1/2 for travel and 1/2 to bring down by WR for the year.
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