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Old 12-28-2014, 10:35 PM   #21
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I have used MS Money to track investments for years, but I never took the extra step of tracking income and spending. (And now, with MS Money no longer supporting on-line updates, it's not an option anyway.)...
I also used MS Money to manage investments up until it went defunct. For investment, it had some features that Quicken still does not have. It also allowed downloading of credit cards and checking account transactions, but I did not use it. I vaguely remember that the process was not as easy as it is now. I once went through the hassle to set it up with my checking account, and before I could finish setting it up with the brokerage accounts, my computer crashed, and I never bothered with it again.

When MS Money went defunct, I switched to Quicken and this time decided to make use of more capabilities of the software. The process is easier now, and it might be because of the improvements made at the financial institution end rather than due to the difference between MS Money and Quicken.
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Old 12-29-2014, 06:54 PM   #22
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We never tracked our spending or budgeted for that matter. We spend carefully, focussed on value, and always lived below our means. We occasionally revisit monthly recurring items for competiveness to similar offerings.

The only time we tracked it was prior to early retirement. Did a quick tab of our annual expenses (cash withdrawals, on line bill payments, etc) to arrive at a number. Grossed it up to include travel and some cushion. It came out to $6K month, $72K after tax. This has been our average burn rate for the two and a half post retirement years. This year we will be about 5K over...attributable to prepayment of some 2015 travel. We will increase the estimate to $74 or $75K going forward in 2015 to cover inflation. And if we go over, we go over. It won't be the end of the world nor will we have to rework anything.

We do not fuss over the individual components. At the end of the year it is simply a total number to us.
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Old 12-29-2014, 07:17 PM   #23
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Many here tracked their spending for years before RE. I did not do that. But I set up a spreadsheet and went back three years, including our credit card spending to get an estimate. That's one of the ways I knew we could RE.

But there always seems that extra spending comes up.

I plan to track spending and investments carefully in the New Year, as I will finally have time to do so.


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Old 12-29-2014, 09:11 PM   #24
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I have tracked continually since I got an IBM XT. The biggest pita is splitting Walmart receipts...groceries, cloths, gifts, medicines...you name it.
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Old 12-29-2014, 09:20 PM   #25
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Another Quicken user here. Track every penny which is easy since we rarely pay cash for anything.
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Old 12-29-2014, 09:44 PM   #26
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When we used to track with quicken we would print out the report of spending by category and take a look at it, say wow, then huck it in a file cabinet. Got bored of it real quick.
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I am going on 35 years of careful expense tracking
Old 12-29-2014, 10:25 PM   #27
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I am going on 35 years of careful expense tracking

Early on I used normal double entry journals and ledgers. In the 90s a son wrote me a basic program that did the same. Now, I use excel in a single entry format. I am sure I miss some expense, that is just the facts of life with single entry. But all this tracking has taught me what things cost, how saving money one place can cost money elsewhere, how food quality costs more money.

One thing that comes from this is that it is very easy to know when I am being bs'd. You can save money on basics, but not much without sacrificing quality or altering your life trying to hunt down "bargains".

Every annoying hour one goes driving around trying to save a buck fills time with what would be for me at least very unrewarding activity. Struggling in traffic is not my idea of how to spend time, retired or not. For food at home I have so far this year spent $5005 on groceries. None of it is convenience food and very little is deli stuff. I eat some meals out, some with friends, and have friends over for meals, but I believe that these balance out other than the meals out. I live in an expensive neighborhood to go out to eat, so I call that entertainment and account separately, and do little of it. It is definitely a date night thing.

So I am spending $5000 feeding me, at home. In Washington there is no sales tax on food, but high sales tax on everything else and and astronomical sales taxes on liquor. It would be much easier to double this food expense than to cut it by 1/3. The only way I could cut much would mean more starch, the way they fed us at university, and for the same reason. It is cheap. However, I weigh few pounds less than the day I graduated high school, with no struggles or sacrifice, and to me this is a value worth getting.

This $5005 does include a modest amount of decent but not expensive wine and some paper products but few sundries and personal care things like toothpaste.

Ha
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Old 12-30-2014, 12:46 AM   #28
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Early on I used normal double entry journals and ledgers. In the 90s a son wrote me a basic program that did the same. Now, I use excel in a single entry format. I am sure I miss some expense, that is just the facts of life with single entry. But all this tracking has taught me what things cost, how saving money one place can cost money elsewhere, how food quality costs more money.

One thing that comes from this is that it is very easy to know when I am being bs'd. You can save money on basics, but not much without sacrificing quality or altering your life trying to hunt down "bargains".

Every annoying hour one goes driving around trying to save a buck fills time with what would be for me at least very unrewarding activity. Struggling in traffic is not my idea of how to spend time, retired or not. For food at home I have so far this year spent $5005 on groceries. None of it is convenience food and very little is deli stuff. I eat some meals out, some with friends, and have friends over for meals, but I believe that these balance out other than the meals out. I live in an expensive neighborhood to go out to eat, so I call that entertainment and account separately, and do little of it. It is definitely a date night thing.

So I am spending $5000 feeding me, at home. In Washington there is no sales tax on food, but high sales tax on everything else and and astronomical sales taxes on liquor. It would be much easier to double this food expense than to cut it by 1/3. The only way I could cut much would mean more starch, the way they fed us at university, and for the same reason. It is cheap. However, I weigh few pounds less than the day I graduated high school, with no struggles or sacrifice, and to me this is a value worth getting.

This $5005 does include a modest amount of decent but not expensive wine and some paper products but few sundries and personal care things like toothpaste.

Ha
35 years of careful expense tracking? That's astonishing and so commendable.

My food spending has gone up this year too, because food prices here are soaring and (like you) I will not cut back on the quality of my food at this time in my life.

If I had to cut back on something, I would attack a number of other types of spending first. But I don't have to these days.


I use Excel too, and at the end of the month I figure out how much I spent by adding up all my expenditures. I check it by looking at how much is left in my bank account and wallet, and comparing that with how much should be there. Every now and then I will forget to enter that I bought stamps or got a haircut, but this method catches any errors like that for me.
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Old 12-30-2014, 03:17 AM   #29
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I tracked expenses in a very detailed manner when I was first starting out. It's great that you know the exact dollar amount you spend.

Now that I'm FI, I glance at credit card and checking statements monthly, but have no desire to look thru everything with a fine tooth comb. We spend quite freely, but well below established sustainable withdrawal rates.

To me, while RE is nice, the FI part is better.


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Old 12-30-2014, 04:54 AM   #30
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Tracking is still very important to us - every week I enter spending into iBank (a great alternative to quicken, which I used to use). I don't go crazy over it - cash withdrawals are just "cash" and not what we spent the cash on! But tracking the overall total month by month, year by year, and - most importantly - by five year rolling average is really important to us. As long as we keep on the good side of the average- and as long as the average is well within swr by a handful of different methods- we can fully relax. Otherwise, we'd know to take action.


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Old 12-30-2014, 06:47 AM   #31
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I use Mint instead of Quicken now. I like that it is available in an app instead of sitting down at a computer to go over stuff.
I do use a spreadsheet to work out budgets every now and again. Our food budget is fairly high, but that doesn't bother me too much.


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Old 12-30-2014, 08:52 AM   #32
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I started spreadsheeting expense (just a flat file/manual entry, no downloading or fancy stuff) in 2009, after joining the forum. Like others, I have seen the steady upward march of grocery prices - almost 10% per year since I started tracking, and we're not eating more or better food than we were in 2009. Because food containers have shrunk, even at the box store, the number of times one needs to buy something has increased.

Other interesting facts sometimes surface via the tracking process. Just bought 4 new Michelin Defender tires at the box store for a total cost of $490 - tires have a 90,000 mile guarantee, and are clearly better quality than the ones we paid $521 for, 5 years ago, at a local "Lowest Prices Anywhere" tire place.

Microwave we bought in '09 for $180, cost $230 this year to replace with the same model (new). The old one became junk when the open/close mechanism (always the weakest point) stopped working. The one before that, a Japanese model, had lasted 25 years. The Chinese must be making money hand over fist.

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Old 12-30-2014, 11:02 AM   #33
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I started tracking expenses with MS Money in '99 and switched to Quicken when I made the Mac switch in 2005. I still use Quicken, and in fact just upgraded to Q4M 2015 for $25 thanks to a poster on the forum; but also am a big fan of Mint. Been using it to track budget since mid 2011.

I'm a 50 year old early retiree with a family of 5. For 2014 we spent $66,012 which includes everything. As for expense tracking, I have a big category I call "Home" which includes everything that is not a fixed monthly expense; i.e. Utilities, Morgtage, RE Tax, Insurance. Every other expenditure gets logged as a "Home" expense. I budget $4K/month for this category and the moving slider on Mint lets me know how we are doing for the month. The Mint widget that sits on the menu bar is awesome for keeping me informed on all my accounts. It's the best awareness tool I've used.

Our actual spending allowance for the year was $78K and we came in $12K below that. Not sure I should be dancing, but that cash will most likely turn in to a 2-week family trip to Italy in 2015.
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Old 12-30-2014, 11:34 AM   #34
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I started tracking expenses back when Quicken first came out, probably in the late 1980's? That was when I was married to my ex wife.

I remember showing her the expense breakdown and it was apparent to me she had no interest in knowing where the money was going. Her idea of budgeting and tracking was to make sure the checkbook balance was at or very near to zero at the end of each month. As you can assume, the marriage did not go very well and ended in the early 90's.

I continued to track expenses being single and raising two teenage daughters on my own for several years. That was a struggle and it was hard to LBYM at that time. We got through it and I paid for both college educations and got them off on their own.

Now that the nest is empty and new DW is onsite and is reasonable with spending and LBYM, the tracking of expenses is limited to making sure we live within the established budget defined by SS + RMDs. Except for the black holes of spending around holidays, we are consistently on track to remain within budget. No longer do I track all expenses, just a rough estimate of outgo.
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Old 12-30-2014, 12:34 PM   #35
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The nice thing about using software for automatic download of transactions is that I can drill down on certain expenses if I want or need to. Usually, I do not have too. Just a glance at the summary screen will tell me where I am with respect to my target 3.5% WR. For that I look at expenses in the last 12 months. The idea is to see if there's a discernible trend.

And then, when I need to look into details, everything is there for me in one place. For example, this year I spent up to 4.1% WR. A quick glance tells me that it was due to home improvement and repair projects. Question answered.

We never had specific budgets for each category, and hope to never will. Now, as long as I can stay within 3.5% WR, I am cool. But the ability to dig down whenever and wherever I want to saves me a lot of time. For example, I recently saw the automatic charge for my umbrella insurance policy. Was it raised from last year? A couple of clicks and I found that it was actually lowered. Nice!

The convenience of having a piece of software doing all the work for me is worth the $60-70 I spend once every 3 years for it.
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Old 12-30-2014, 01:20 PM   #36
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I have an accounting and finance degree. The finance degree made me realize I do not need to do the accounting. The category I tracked was the amount I invested every year. How any other money was spent was of little importance but I'm assuming it was to sustain life and have fun.
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Two separate trackers
Old 12-30-2014, 03:02 PM   #37
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Two separate trackers

Great thread. Interesting to see the different styles of use. I'm a non budgeting guy, and use it primarily to look up historical data, to see year to year trends, and get a big picture of the spending.

I wonder if anyone does like DW and I do with two separate instances of tracking software. Since she hasn't been earning money the last 23 years, but has her own budget categories she is responsible for, I fork over a set amount, automatically, every couple of weeks. So in my instance of the tracking software, there is an opaque blob of funds that covers mostly groceries, kid stuff, and DW's clothes and stuff like that. Maybe once a year I export both instances and do a roll-up that has the detail from DW's spending categories.
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Old 12-30-2014, 03:39 PM   #38
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+1 I did this for a few years near when I ERd. It was very helpful for catagorizing my routine expenses so I could forecast what I could expect in retirement. After ER my predictions proved accurate so I stopped bothering with tracking. If I felt the need to cut spending back I would do it again to zero in on where I was wasting money.
DH has been tracking our spending in Mint, for several years before ER and now in the 3 years since. It helped us make informed decisions re. ER; and, now, has shown us that we can live comfortably on pensions and SS only, without tapping savings.

So, we feel free to allow the IRA's to grow while we continue to educate ourselves on more aggressive investing. The lessons learned have paid well this year, adding to our comfort in retirement investing. We're growing the nest egg, hoping to prepare for inflation in the decades ahead.

Not sure if I've answered your question. My point is this: tracking expenditures gave us rock-solid confidence that ER would work. It made our FIREcalcs believable. We have never needed to second guess the financial feasability of ER.

Mint is free. Yet it provided confidence that led to freedom.

What a deal!

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Old 12-30-2014, 04:19 PM   #39
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Great thread. Interesting to see the different styles of use. I'm a non budgeting guy, and use it primarily to look up historical data, to see year to year trends, and get a big picture of the spending.

I wonder if anyone does like DW and I do with two separate instances of tracking software. Since she hasn't been earning money the last 23 years, but has her own budget categories she is responsible for, I fork over a set amount, automatically, every couple of weeks. So in my instance of the tracking software, there is an opaque blob of funds that covers mostly groceries, kid stuff, and DW's clothes and stuff like that. Maybe once a year I export both instances and do a roll-up that has the detail from DW's spending categories.
For many years, my wife took care of bills, while I managed the investment side. And while we were still working, as we underspent the paychecks that got auto-deposited, I would look at the checking account every so often, and moved it to a brokerage account as needed. Not to brag, but there was a time when I was so busy with work, and the checking account had $100K built up and sitting there earning little until I moved it out. And it built up again.

When I stopped having earned income, I knew that I could no longer be sloppy and count on LBYM attitude to keep us out of trouble; my means are now at the mercy of the market god. It was by searching the Web for a SWR number that I came to this forum. Then, I was surprised to see most people did not have a cavalier attitude like I did. And I realized that I did not know how much we spent for food, for housing, etc... Just knowing that we underspent our pay was no longer good enough; there would not be any pay. Duh!

My wife still takes care of bills and sets up autopayments like she did. And I still look at the checking account balance, but more frequently now via Quicken, to move money into it as needed. We still have no detailed budget, and I only see the expenses after the fact. But I still need to know. And 3.5% WR is what I aim for, how we fit in that number is of lesser importance.
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Old 12-30-2014, 05:15 PM   #40
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... I would look at the checking account every so often, and moved it to a brokerage account as needed.

...

And I still look at the checking account balance, but more frequently now via Quicken, to move money into it as needed.
So your role changed, but your spouse's stayed the same. Same here, but I keep pumping money in (was: paycheck, now: brokerage accounts), and she keeps spending it!
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