2015 Expenses

[Moemg]

My expenses have been creeping up in the last few years so I went over my spending carefully . Surprise , It is being a grandmother that has caused the spending . Lego's are not cheap !

 

[Mulligan]

I also track expenses with Quicken.



I haven't figured the annual spending yet as we had a few big expenses this year: New house A/C ($6K), new roof ($12K), Two new mattresses ($3).



We also increased granddaughter's college expense help since her parents were not able to handle very much. We paid her tuition and books for one semester and provided $100/month for spending throughout the year. This amounted to about $3,700. She has a job at the college, but it doesn't pay much. She graduates this year (yeah!). I also covered the A/C repair cost to her aging Ford Focus ($1200 repair).



For some reason, DW is one of those people who absolutely HAS to HAVE cash in her wallet at all times. That irks me to no end as I can go for months without cash in my wallet and not care. So our "Misc" category is filled with ATM entries from her use of cash. The story line is "lunch with the girls (church group), a few things at Walgreens, I picked up the dry cleaning, I don't remember, etc". Needles to say, it's a good thing I keep the reins tightened or I wouldn't be typing this.

Your wife is a sensible woman.... I always have cash in my wallet...cash in my car...cash in my house... You never know when you might need some cash! I even have useless cash...I started a winter project rolling change that has accumulated in a bucket... Rolled $150 worth today before I got bored...


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[aja8888]

Your wife is a sensible woman.... I always have cash in my wallet...cash in my car...cash in my house... You never know when you might need some cash! I even have useless cash...I started a winter project rolling change that has accumulated in a bucket... Rolled $150 worth today before I got bored...


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Hey, if I need cash (rarely do), I ask her for some!

I also have an ATM card I carry, but I don't remember the PIN!

 

[Mulligan]

Hey, if I need cash (rarely do), I ask her for some!

I also have an ATM card I carry, but I don't remember the PIN!

I am hopelessly Neanderthalic in my money attitudes....what if they dont take my credit card? What if they steal my code on my debit card strip and wipe me out? What if my credit card doesnt work? ...You know, all those things that could possibly happen but have never happened to me anyways.... And deposit money in a bank without handing it to a teller personally? Aint gonna happen!
But I sure love trading stocks online without using cash.


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[Helen]

My expenses have been creeping up in the last few years so I went over my spending carefully . Surprise , It is being a grandmother that has caused the spending . Lego's are not cheap !

I have no doubt that gives you great joy!!! I have two great nieces (ages 2.5 and 5.5) that I love buying gifts for. The only part I don't like is paying for the postage

I started taking photos of what I send to them because a year later I can't remember if I bought them that or not. I lucked out and got on the Columbia Sportswear friends and family list so I can get incredible deals at their outlet and employee store.

 

[Lucantes]

Video gaming | ..2%

+1 I love that this gets its own budget category!
This is what I keep trying to explain to my wife (just kidding actually, she has no problem with me playing games)!

 

[W2R]

+1 I love that this gets its own budget category!
This is what I keep trying to explain to my wife (just kidding actually, she has no problem with me playing games)!

That's great that she doesn't mind!

I love video games.

 

[kcowan]

my entire withdrawal went to support a poor little old unemployed lady surviving in hurricane devastated New Orleans. ..

As long as it was not augmented by an intelligent woman spending a bundle to live near her best friend!

It is amazing how words can be spun to tell any story....

BTW congratulations on the good luck in finding the perfect house! Sounds like a much more practical solution than moving north.

 

[kcowan]

2015 was my first full year of ER. Our spending for DH and I was 32K, which after my tiny VA pension comes out to a WR of under 1.2%.

Same after 13 years of retirement (1.2%), after 5 pensions (incl. DW).

I have a feeling that it will be going up in 2016 due to the denominator shrinking!

 

[NW-Bound]

That is TMI... You gave yourself away... You have too much money...Us "wealth confiscators" are coming by to pay a visit today.

I just remember that the number I got off Quicken screen does not include the income tax to be paid. Ugh! You are right. The wealth confiscators are coming for me soon. Before April 15 anyway.

 

[W2R]

As long as it was not augmented by an intelligent woman spending a bundle to live near her best friend!

It is amazing how words can be spun to tell any story....

BTW congratulations on the good luck in finding the perfect house! Sounds like a much more practical solution than moving north.

Thank you! It seems to be working out wonderfully for us, and I am so happy living here. Hopefully Katrina will be a once in a lifetime disaster for us, although there are no guarantees. And yes, I love trying to twist words around like that (in jest), just for fun.

 

[dvalley]

No set budget but was pleasantly surprised to see the total expenses were $55k (about 55% of my take home too). $27k of that was mortgage and $8k was the new roof. T Not too shabby for SoCal. Now if I can keep my pay/employment for the next 10yrs without any major unforeseen set backs...and decent market returns I just might be FI by 50-52.

 

[jabbahop]

I also admire the folks on this board who are able to live on less than 30k for a single person and less than 50k for a couple.

Very impressed with people on this board.


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[kcowan]

Part of our ability to do it is all the airline points amassed during all those working years.

 

[palomalou]

Hard to even say. We shaved off 25% from our projected budget, but mostly because we had to "loan" in-laws that +10k. We earned from part-time work enough for the in-law issue. So are we on budget or not?

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[audreyh1]

OK - it takes until at least the 13th of Jan to know how much we spent in 2015, because that's the last of the credit card transactions that I download when the statement is available. I reconcile the credit card statements as well to make sure that expenses hit the right categories.

In 2015 we almost met our spending budget. We ended up being about 2.5% under budget. In 2014 our spending was way under budget, like 21% under budget. In 2013 we were about the same as 2015 - even closer to budget. Just 1.3% under which is the closest we have every come.

Our target budget hasn't changed since the late 2000s - not even adjusted for inflation. It was initially selected to be quite generous, so I'm not surprised that we haven't needed to adjust for inflation. Approximately 19% of the budget goes to family gifts and charitable donations, and we usually spend close to all of that.

One of these years I will increase our budget. Our annual withdrawal less estimated taxes has been exceeding our target budget by quite a bit for many years now. Knock on wood!!! - hopefully that continues.

 

[rodi]

One of these years I will increase our budget. Our annual withdrawal less estimated taxes has been exceeding our target budget by quite a bit for many years now. Knock on wood!!! - hopefully that continues.

I'm confused. Your plan is to withdraw a lot more than your annual spending budget? Why?

 

[audreyh1]

I'm confused. Your plan is to withdraw a lot more than your annual spending budget? Why?

Actually - my comment meant that I hope the portfolio doesn't shrink so much that the withdrawal less taxes owed is less than our target budget. My income goes up and down depending on the year end portfolio value. I could potentially take a 40% hit to my income but (hopefully) it will still fund our target budget.

[Knock on wood - I don't want to tempt fate here!!!]

Or, I could say it's just that our portfolio has grown so much by now that it funds way more than our target budget. I don't reduce my planned % withdrawal just because the portfolio is growing faster than my expenses. And what if it shrinks again due to a big market sell off? Then I hope we can still meet our target budget. If not, I've still got some rainy day funds set aside to help smooth things over.

But to answer the question as asked:

Because, according to FireCalc and various other models, I can, and still have my portfolio survive for a very long time.

I consider my withdrawal to be the amount I should withdraw each year regardless of whether I choose to spend it that year or not. It's money I can now spend whenever I want.

In other words, I see the x% I withdraw each year as "I won the game - take that money off the table." I choose not to subject any surplus to market volatility. According to the models, what remains in the portfolio is enough to fund my future, so I don't need to risk any more than that in equities or other long-term investments.

It's just a different philosophy. I know I am in the minority here. Most folks prefer to reinvest any excess in order to grow their portfolio in the very long run. Whether this optimizes amounts left for heirs, or means more spending in later years, or whatever.

So my question is: Why not?

 

[LastOfTheBoomers]

We were pleasantly surprised to be under budget by $3K for the year even with two unexpected budget busters - dental and travel were double what was planned.

For 2016 we have already eliminated 2800 in planned expenses. So we are not planning on increasing our withdrawals

 

[rodi]

Audrey - thanks for explaining. I forgot you were on a variable WR. Now it makes sense.

 

[FANOFJESUS]

W2R any pics of the new house? I thought your old one looked sharp by the way.

 

[audreyh1]

Audrey - thanks for explaining. I forgot you were on a variable WR. Now it makes sense.

Yeah - that's really the crux of the matter.

If you use a WR thats based on % portfolio value each year, rather than one based on a starting value increased by inflation each year, what should you do if your portfolio grows faster than your spending?

Well there are several approaches, and IMO all perfectly valid. It basically depends on your short-term versus long-term goals.

And just because your portfolio grows faster than your spending for several years doesn't mean you won't get a nasty setback once in a while due to a big drop in portfolio value due to a nasty bear market - or even several years going sideways.

These things have to be carefully thought out, and I've noticed that goals are very dependent on the individual. Some see great value in a large terminal value for the portfolio and prefer to only take out what they really need to spend and pay taxes each year. Others see value in having more funds to spend or gift while they are young as long as the portfolio long-term survival is not compromised.

 

[W2R]

W2R any pics of the new house? I thought your old one looked sharp by the way.

Thank you! Here's one. I love the fact that it has an oversized two car garage with workshop and storage rooms, that it has a wonderful shower like I always wanted, and above all a great next door neighbor.

This was most of my 2015 expenses. If all real estate is "location, location, location", then I just struck gold.

 

[powerplay]

Thank you! Here's one. I love the fact that it has an oversized two car garage with workshop and storage rooms, that it has a wonderful shower like I always wanted, and above all a great next door neighbor.

Very nice! I can see why you are so happy there.

 

[Meadbh]

Thank you! Here's one. I love the fact that it has an oversized two car garage with workshop and storage rooms, that it has a wonderful shower like I always wanted, and above all a great next door neighbor.

And great curb appeal!