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Old 07-21-2015, 11:53 AM   #41
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When I reconcile my credit card statements I look at each receipt. Most receipts will match one category such as "groceries". And Quicken automatically fills those in for me in most cases. But I buy various things from some stores, so sometimes it might be "software" or another time "entertainment" for example. And yes, I look at each receipt when I reconcile my statements and make sure the category is correct, including the very rare split. For travel spending it is broken out by lodging, dining, tours, transportation, etc. I find that level of granularity useful for trip planning purposes, and it's usually by receipt, not the items listed on the receipt.

Most of my Costco receipts are under grocery, but monthly there is at least one prescription purchase which will be a separate receipt, so I make sure that is listed as medical prescription - that might become important for tax purposes as well as budgeting. Or if we bought a ladder, or something for the garden, or home "office", or tax software those will go in different categories.

Sounds like pretty much what NW-Bound does too. And I also have category fuel, and subcategories auto and motorhome. Same for maintenance, parts, repairs, registration, etc. I like to have the vehicle expenses split out.

So I make sure categories match before I run my YTD spending report to see the breakdown.
For the most part my Quicken budgeting and tracking are similar but I don't track to the level of details you do. For example my travel budget and tracking is one category that includes hotels, airplane tickets, restaurant meals, tours etc..

My grocery category covers everything we buy at Stop and Shop and Trader Joe"s. My computers and related supplies and software go into "other expenses" and we both have a cash category of $200/month to cover small items that we don't charge on a credit card.

This pretty much satisfy my tracking needs at this time.
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Old 07-21-2015, 12:16 PM   #42
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For the most part my Quicken budgeting and tracking are similar but I don't track to the level of details you do. For example my travel budget and tracking is one category that includes hotels, airplane tickets, restaurant meals, tours etc..

My grocery category covers everything we buy at Stop and Shop and Trader Joe"s. My computers and related supplies and software go into "other expenses" and we both have a cash category of $200/month to cover small items that we don't charge on a credit card.

This pretty much satisfy my tracking needs at this time.
Yeah - I broke out travel spending into several subcategories around 2000 when we started traveling a great deal, and I needed the data for planning and budgeting purposes. At one point I was able to generate reports that showed how much we spent on each trip, because I added a name (don't remember what it was called - tag?). That was useful, in that it let me get a good feel for how much similar trips would cost in the future.

Then we went full-time in the RV, and we were traveling all the time - it was just part of our regular expenses, so I didn't use the Travel category for a few years.

Then back to a house, and it became convenient to break out Travel separately again.
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Old 07-21-2015, 12:25 PM   #43
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We track all our expenses and find that Quicken makes it pretty easy to do. Each month I update an "Expense Report" that all our spending since ER. I call out any categories where we spent way above average or one-time expenses. It also contains the trailing 12 month spend vs the budget. That, to us, is the important number.

Over the years, I've reduced the number of sub-categories since we found the extra granularity didn't add anything. We don't budget per category.

Besides the comfort of knowing we are within our annual budget, this exercise shows us where we spend the money and it has helped us direct our spending to areas that we find more enjoyment/satisfaction.
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Old 07-21-2015, 12:47 PM   #44
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Yes, what I pay most attention to is the last 12-month expenses. If it is within reason, then there's no reason to worry.

I do not have a budget per se for each category. Still, I like to know what I spend on discretionary items like travel, gift, donations, and what it costs to carry the 2nd home. It is so that I know what I can cut down if the market tanks.

I do not break down toiletries and sundries household items from grocery receipts because they are the least of my expenses. In addition, those are for essential living, and if I worry about that, I must be in really bad financial shape.

Having some of the info on my fingertips is nice for other reasons. For example, looking at the electric bills for the 12 months preceding and after I changed my pool pump showed me that I saved roughly $250/year on electricity with the new variable-speed pump. So, I can recommend this type of pump to people because it pays for itself after 4 years.

Sometimes it is interesting to know some tidbits by playing with Quicken when I have nothing better to do. For example, I just saw that I spent $1700/yr for gas when I was still working part-time (wife already ER'ed), but only $500/yr in the last 12 months (not including RV fuel of course). And the grocery bills, including all household sundries were $5700 in 2010, but only $3000 in the last 12 months. Whoa! What's happening here?
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Old 07-21-2015, 12:49 PM   #45
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Congratulations prose3589! Great way to start!


I used Quicken for years, downloading credit cards, splitting COSTCO receipts to various allocations, etc. It helped explain to my wife when we didn't have any money for something, I could quickly see what we (over) spent on something.


Now, 2 years post ER, and I have fallen off the Quicken wagon. Little interest, little need, etc. More focused on enjoying life, not worrying about how many $5 beers I had.
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Old 07-21-2015, 01:27 PM   #46
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Do you people actually go line-by-line on the cash register receipt and categorize each purchase?

-ERD50
I enter all receipts manually into Quicken, and split costs into appropriate cost centers when needed. It's more work but it is also more accurate.

But to each his or her method.
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Old 07-21-2015, 04:46 PM   #47
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I have used Quicken since 1995, I tag all trips which collects all expenses for that particular adventure. I also sub categorize pets So each dog gets a line and than all dogs get a line, same with cats, tortoises, wildbirds and guinea fowl. I like to do this as it also shows vet appointments or meds used.

so what did I do today.
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Old 07-21-2015, 05:33 PM   #48
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I enter all receipts manually into Quicken, and split costs into appropriate cost centers when needed. It's more work but it is also more accurate.

But to each his or her method.
Most of my receipts/transactions are imported, and category assignment is mostly automatic, so all I have to do is review and make a few category reassignments for the exceptions.
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Old 07-21-2015, 05:43 PM   #49
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Most of my receipts/transactions are imported, and category assignment is mostly automatic, so all I have to do is review and make a few category reassignments for the exceptions.
+1

Just now, out of curiosity, when I tried to see how much I spent on gasoline back when I was still working part-time in 2010, saw on Quicken that I had several fill-ups costing in the triple digit. No way I could put that much gas in a car, so of course it had to be for the RV. And of course it was, as the date of the expenses corresponded to my 1st ever RV trip.

So, just a few clicks to move it from "Auto:Fuel" to "Travel:Fuel", and now the record is straightened out. Ah, I feel better now.
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Old 07-21-2015, 05:52 PM   #50
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I am glad to see I'm not alone in my quicken fetish. :-)

Am now in the "starting to more seriously plan for post-work" stage, and the easy customization of the reports is nice. Rather than just the detailed spending/category reports by year, I am now occasionally running a "retirement expenses" report that strips out the work-related expenses and leaves us with baseline spending upon which we'll build. (Taxes, other than property, are stripped out--as we'll have 1) much more control over them; and 2) will be paying far less no matter what)

DW still doesn't see why I'd ever want to know how much we spent on groceries in, say, July of 1996--but you never know when data might be useful. :-)
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Old 07-21-2015, 07:03 PM   #51
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Very obvious that expense tracking is a very personal thing. If it works for you great. As long as you stick to it and adapt your system to your needs you will have a valuable tool. Shouldn't be too concerned with what others do.
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Old 07-21-2015, 07:14 PM   #52
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I feel like a slacker now <laugh>. All I do is record the monthly cashflow out of the checking account every month, then go through the charge card statement and identify special one-time expenses and travel expenses. So I've got average monthly and annual spending, average monthly and annual travel expenses, and monthly and annual average expenses minus special and travel. Right now that goes back five years, tracked in a spreadsheet.

As long as we keep the annual total expenses down around 3.5% of the retirement date assets, I don't worry about where to cut. We're genetically pretty frugal, and during bad years we'll just cut back on travel. Hasn't been an issue yet in three years of retirement, fortunately - so far sequence of returns has been on our side.

I'm afraid if I tell my wife to cut down on the granular expenses like organic food, she'd start questioning the wisdom of retiring early.
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Old 07-21-2015, 07:46 PM   #53
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I have some very broad budget categories. I have an amount budgeted for basic living expenses, and then an additional amount that covers charity/gifting, and special expenses (like a new computer) and "extra" travel, i.e. all the discretionary expenses. As long as I am generally on track throughout the year in each broad category I don't worry about how much is spent on groceries versus fuel, etc.

But I like to have my expense reporting broken down in finer detail. I do like to see what I am spending on per month on say groceries, or eating out, or utilities, etc., and compare year-to-year.
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Old 07-21-2015, 07:52 PM   #54
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I used quicken until maybe 2005, switched to my own spreadsheet for 10 years, and now back on Quicken at the beginning of 2015. I only have about 8 expense categories that I track, and they're categorized automatically through downloads of checking and credit card data. I try to minimize cash expenses, which I normally categorize as misc or dining. I analyze expenses in detail maybe once every 6 months. In the interim, I know I'm on track if I keep monthly atm withdrawals below $600 and monthly credit card bills below $3k.


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Old 07-21-2015, 08:00 PM   #55
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I only started to track expenses with Quicken since 2010. My wife had been doing her thing with Excel for years, and she continues to do that, as she pays all the bills. I, on the other hand, take care of putting money into the checking account and manage the investment accounts.

Prior to using Quicken, I use MS Money for investment tracking. Now, the additional expense tracking requires very little additional work. Our expenses are extremely lumpy, just from the past 5 year data. One year, the biggest item was purchase of the RV and toad. The next year, it was gift to my daughter. The year following that, it was a major home repair. I can look back and see where my money went. It's great.
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Old 07-21-2015, 08:49 PM   #56
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I just downloaded "GnuCash" to start tracking my expense in more detail... It seems like a powerful tool, I just need to work through the nuances in dealing with brokerage account holdings.

I was previously utilizing an excel spreadsheet and was considering Quicken until I read some of the reviews on 2014 / 2015 versions.

If someone here is looking for some software definitely checkout GnuCash; It's free, so it won't cost anything to give it a whirl (except some of your time).
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Old 07-21-2015, 09:48 PM   #57
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...

Do you people actually go line-by-line on the cash register receipt and categorize each purchase?

...
-ERD50
I don't dare break out how much I spend weekly, monthly, or annually on the very last of my many former vices (back in the day when I was fun): my regular decaf cafe mocha. Sitting out alone at my favorite outdoor cafe leisurely watching the morning begin is one of my favorite retirement activities.

Quote:
Originally Posted by audreyh1 View Post
I have some very broad budget categories. I have an amount budgeted for basic living expenses...But I like to have my expense reporting broken down in finer detail. I do like to see what I am spending on per month on say groceries, or eating out, or utilities, etc., and compare year-to-year.
Me too. I've used an excel spreadsheet for decades that gives me an idea of what I'm spending in different categories by month and year. My annual budget is based on that spreadsheet and all spending targets being on budget. Frugal as I am, I'm usually always on budget.
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Old 07-22-2015, 03:02 AM   #58
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I still don't understand how CC statement and bank statements gets one down to the granularity to see where the money is going and make decisions.

We spend a lot at Costco, and grocery stores for example. But that doesn't tell me much of anything useful. Everything from toilet paper and water softener salt is bunched in with discretionary items.

Do you people actually go line-by-line on the cash register receipt and categorize each purchase? And how do you identify things like buying a high grade of something versus a lower grade? If I wanted to further economize, I might learn that buying lower grades of bacon, hamburger versus steak, etc, might save me $X per month. But that would seem to take a lot of figuring, a lot of judgement, a lot of categories. What does entering a prime steak as "grocery" versus entering hamburger as "grocery" tell me - they just both come up as "grocery"? But there is a savings there if I want to pursue it, but how would I see it?

I know what my total spending is (it only comes from two accounts, I just add up the withdraws, and add back any reimbursements or 'transfers' (like moving money from savings to fund a Roth IRA contribution). But I really don't know the detailed breakdown - after utilities, mortgage, insurance, property tax, etc - the big hitters. We try to be careful with our purchases, looking for value. I'm not sure what I'd gain with a bunch of penny-level numbers - what would they really mean to me? What action could I take based on them?


-ERD50
I generally enter receipts on a receipt-by-receipt basis and not on an item-by-item basis in the receipt. For example, most of my spending at Costco goes in to the 'grocery' category because that's what most of my expenditures are there. And we consider TP and water softener salt as grocery items. If in the $200 receipt (is it ever less than $200 at Costco? ) there's a large item that screams "discretionary" or "home improvement" or "clothing" because the amount is large enough to notice, then I'll pull that out and put it in the proper column. Won't even bother with its sales tax contribution. We're not talking about that level of accuracy here - it's just not that necessary for us.

For the bills that just aren't the same every month (like Groceries, entertainment, electricity), yeah, I want to know where it went because then I can spot a trend if something is out of whack like a water leak causing the water bill to trend upwards, for example. The other thing it does is at the end of the year, I can check total expenses in each category and then either adjust the budget for them going forward (personal rate of inflation) or find ways to reduce expenses.

The spreadsheet I have probably has 20 columns: each utility has its own, groceries and restaurants are separate, there's clothing, medical expenses, each type of insurance, homeowner's association, property tax, Amazon Prime, netflix, etc.

I also have a spreadsheet with a scattergram that shows kilowatt-hrs of electricity used per month vs. the average daily temperature in Austin. Dropped 500kw-h off per month on average after adjusting the thermostat (small change) and changing the number of hours the pool pump runs (biggest change) Can you tell I'm an engineer?

Do I need to do even this much? Probably not. But I also enjoy it.

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Old 07-22-2015, 06:30 AM   #59
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When we first retired, I set up a budget spreadsheet. Then when we looked at the actuals, we laughed. What were we thinking with that budget?

But we do maintain a handle on total spending, especially for extraordinary items. We also eliminated all excess spending in the first year of retirement: extra credit cards, charges from telcos and cable cos, use of electricity, etc. And our total spend is well below 4%.

And we often walk to places that we would have driven to when we worked. It is amazing how far you can walk and just enjoy the experience, even developing alternate routes just to explore.

And, of course, we take advantage of seniors' discounts, like shopping on Tuesday, eating at 5:30. In Mexico, comida is served from 2-4 in the pm, so we arrive at 4 for our first and main meal of the day, eating a light breakfast and dinner at home when it is convenient.

There is also Groupon for even more savings. To us, managing the spend line is more important than tracking. That is what got us minimizing telco/cable expenses initially.
Very cool. We're not retired yet, but I got to practice for it for about 10 months between jobs. First thing I did was download all checking account data and credit card data for the previous 2 years to see where everything went. Before that, we were pretty much playing it by ear - we saved a certain amount every year from the paycheck and all bonuses just went straight to savings without a thought. Just looking at the credit card balance just before paying gave me an idea whether we had spent more than we usually did (we pay most things on the card and pay it off every month).

But the data download was indeed an eye opener. Now that it "mattered", I was able to drill down and see where the money was going and identified pretty quickly some areas to cut down on. Granted, many of them were things that were always in the back of my mind, but now I had real numbers and real time to pursue them. Things like adjusting our homeowners insurance, dropping cable, dropped the health club (bike instead), refinancing the house (after I went back to work), adjusting our car insurance, analyzing and modifying the pool pump schedule, adding low-flow shower heads, LED lights, identifying hotspots where insulation was weak in the attic, dropping housecleaners, dropping mowing service and reducing restaurant expenses.

I've been back to work now for over a year and with the exception of slightly increasing our restaurant expenses, we've kept our expenses pretty much where they were during the time I was between jobs. Net result is that even though my current job pays a little less than my previous one, we're now saving significantly more than we were before.

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Old 07-22-2015, 07:54 AM   #60
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I enter all receipts manually into Quicken, and split costs into appropriate cost centers when needed. It's more work but it is also more accurate.

But to each his or her method.
Same here. I've found it to be the best way to ensure that the categories are how I want them. I only do splits when the numbers are significant. I could load them electronically and then adjust categories, but that seemed harder to me.

Manual entry also prompt notes. This really helps when we look back to see what we've spent in the past on something.

Works for us. YMMV.
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