Couch Potato Budgeting and Expense Tracking

[Midpack]

We have an elaborate spreadsheet to track budget/spending (and another to track investments/AA). IME it's not a lot of work IF you build a spreadsheet that automatically slices/dices, charts and calculates everything we want to track **. We enter all the expenses once a month and print out a summary, it's pretty easy, and it tells us how we're doing against budget.

*** I retired over 6 years ago, and I used Excel every day and became pretty good at it. I used functions that most of my co-workers were unaware of. Just this week I needed to make a change to the budget spreadsheet and it took me almost 15 minutes to make the change. It occurred to me that I might not be able to build a spreadsheet like it from scratch anymore...

 

[Scuba]

I used to do a lot more number crunching pre-ER. This year, I've only looked at expenses once but have done quarterly balance sheets. Looking at our 11/30 balance sheet, I realized that I probably don't need to do detailed budget tracking as our NW is up between 15-20% since ER.

I'll probably do a total year spend compared to budget analysis just to see how well we anticipated our spending this year as it was our first year of ER. I do think it's important to have a somewhat accurate picture of total annual spending and a plan for how to source the cash flow needs. My sister didn't have that when she retired at 42. She's 63 now and dealing with the consequences of having too high of a spend rate early in retirement.

 

[retired1]

It's what I call my tiny pension. I am grateful to get it, but it is quite small and not one of these "full boat" pensions like so many people used to get back in the old days. Of course some still do, but not as many as was once the case. I rely mostly upon my investments for income now that I am retired, and my pension takes care of less than 15% of that income.

I also call it my "itsy bitsy teeny weeny yellow polka-dot" pension, thinking of this song:

LOL

 

[brokrken]

I have 3 main spreadsheets. One with investments, one with budget, and one that handles asset allocation. The investment and budget ones I update daily. It's just part of my morning routine. The asset allocation one I get to about once per quarter.

 

[kgtest]

I have 3 main spreadsheets. One with investments, one with budget, and one that handles asset allocation. The investment and budget ones I update daily. It's just part of my morning routine. The asset allocation one I get to about once per quarter.

I am exactly the same with my google sheet. I update the budget maybe once a month though.

 

[hausfrau]

I'm still working and single. One year I tried a careful, detailed spreadsheet type budget for each category of spending. It drove me crazy. I've decided I do much better just living within my means on a month to month basis. That is, with my biweekly paycheck, I pay myself first into my savings/retirement accounts (automatic deductions, so I never think about it), pay my regular bills, then live off whatever remains throughout the month. It is a balancing act: if I buy something fun, I cut back a bit on restaurants. Etc. Works for me.

This is what we do too. I tried keeping a spreadsheet and even using budgeting software, but it didn't really change my behavior. It just told me I was spending X amount on food, gas, etc., which I kind of already knew. The amount we are spending is OK with me. We could probably shave a couple hundred bucks off (hello food/restaurant spending), but since we hit our savings goal, I'm not sure I care that much.

 

[karen1972]

This reminds me of setting up mom's "budget" after my dad passed. Mom has a notebook where threw down some numbers of what she thought she spent.

So I just pulled a yearly report from her Chase account and it looked like
1. Property Tax
2. Insurance
3. Gas/Electric/Phone
4. Fuel
5. Food
6. Car Maintenance
7. Home Maintenance
8. Health Care
9. Charity
10. Cash bucket

Thats it. She doesn't really travel or spend money on "stuff". The cash bucket is a fixed $ amount she takes out each month and covers lunch out with the girls, her hair appointments, pet grooming, gift for kids, etc.

Her only real variable is health care, even maintenance is pretty routine and predictable.
Since she shops only at 1 or 2 stores, its very easy to figure out what is what.

She spends about $25K a year which is covered by SS/farm income, I put another $15K in her savings and told her to keep spending until her savings were zero and I'd re-fill it again in January. I figured that was easier for her, she has it all up front and knows as long as she has money in the account, she can spend on whatever she wants until the end of the year. Since she was never a spender, hoping to encourage her to live a little by having the money available to be spent.

 

[Danmar]

I use a similar approach to OP, ie opening cash plus income less expenses equals ending cash. This way I can reconcile the cash balances to ensure I have recorded everything. Monthly columns with forecast becoming actual over the year. I track more expense categories though, maybe 60-80 line items. Group these for each of our properties.

 

[brett]

We don't keep track of our expenses at the micro level.

We buy most things on our credit cards. Each month I take a tape of what we have spent based on credit card payments, auto pays, cash withdrawals etc.

It takes less than five minutes. I look at the numbers once a year because we often have significant variations from month to month if we are prepaying travel expenses. More out of interest than anything else. I have no intention of getting down to the level of food, entertainment, etc. We know what we spend and where we spend it.

We spend more time reviewing our investments, returns, and allocations in an attempt to ensure the balance of maximizing return while protecting the downside.

 

[RunningBum]

Everything goes through one of two checking accounts eventually (for example, credit card payments cover everything I've charged). For each month I take the beginning balance, + deposits, - end balance, to see what I've spent. If something happens to be spent directly out of another account I'll include that. I keep a yearly total and a rolling 12 month total. I have an extra column for exceptions, like extraordinary tax payments. Just because I happen to be converting more and liquidating a taxable holding, I don't want to skew my budget this year because of the large tax bill.


If I felt like my spending wasn't in control I'd categorize the expenses. Somehow I don't mind investment tracking and tax planning to the nth degree, but I dislike close budget tracking. Whenever I get started, I get thrown by things like a Costco receipt that might be part groceries, part other stuff.

 

[Music Lover]

I've never had a budget and don't track any spending...all I do is check balances, make sure that statements are correct, and make sure that bills and other charges are accurate and are paid on time.

 

[W2R]

[...] I dislike close budget tracking. Whenever I get started, I get thrown by things like a Costco receipt that might be part groceries, part other stuff.

Well, you just have to make a rule for that. I don't shop at Costco, but my rule has always been that anything bought at a grocery store is groceries (even if it isn't). I keep that in the back of my mind when evaluating spending in categories. There's only so far that I am willing to drill down on a receipt.

 

[Carpediem]

Whenever I get started, I get thrown by things like a Costco receipt that might be part groceries, part other stuff.

I run into this situation too. How do ya'll handle it? Do you take the time to go through your receipt and break it out by the appropriate spending category?

Note: Posted before I saw W2R's reply.

 

[RunningBum]

Well, you just have to make a rule for that. I don't shop at Costco, but my rule has always been that anything bought at a grocery store is groceries (even if it isn't). I keep that in the back of my mind when evaluating spending in categories. There's only so far that I am willing to drill down on a receipt.

I did that for awhile (before I even joined Costco), then I decided not to bother since it wasn't likely to be too accurate or useful to me. I don't even know if I'd lump Costco in with groceries, or with Walmart/Target type stores. It came down to deciding it was a problem that I didn't need to solve. I could probably do searches on my CC transactions if I really wanted to know what I spent at certain stores or types of stores.

 

[audreyh1]

Same here - grocery store is groceries, even if it’s not edible. If it’s a large item like clothing I’ll split it out when I reconcile the credit card receipts.

We also have a category “household” that covers a lot of miscellaneous items from hardware stores, Amazon etc.

The rough categories are enough. We have a “cash” category that obviously doesn’t say what it was spent on, and we don’t use much cash. If I withdraw cash for specific reason that it’s categorized by the purpose.

I don’t sweat the small stuff. Mainly interested in the larger groupings so like travel expenses, fuel, insurance, utilities, taxes, etc. I have them broken out into subcategories. But it’s the big picture I mainly track.

 

[Luck_Club]

Use CC & Bill pay records at the end of the year to add up deductible business expenses, which captures utilities, taxes and mortgages. Everything falls under MISC, and I haven't got a clue how much gas vs tires vs clothing or any other category. All I track is making sure at the end of the year, there is more in the vault than the year before.

One thing I do every so often is run a monthly cash flow against my fixed expenses, to see if there is any trimming that is needed or can be done.

 

[ABQ2015]

I run into this situation too. How do ya'll handle it? Do you take the time to go through your receipt and break it out by the appropriate spending category?

Note: Posted before I saw W2R's reply.

I break it out by category but then I go to Costco or Target only every 3-4 weeks and to a grocery store maybe every ten days. And I spend a lot on some OTC medications and special skin products so want to track those separately from food and cleaning supplies.

 

[Danmar]

I call everything at Costco, grocery stores, liquor stores, Etc CASH. I should probably break out the wine, beer, and liquor, but that would be embarrassing.

 

[tmm99]

I call everything at Costco, grocery stores, liquor stores, Etc CASH. I should probably break out the wine, beer, and liquor, but that would be embarrassing.

 

[jollystomper]

I should probably break out the wine, beer, and liquor, but that would be embarrassing.

Or... a PARTY!!

 

[HarveyS]

I set up an annual budget, then track it quarterly. Same big 12 categories. I don't worry what is in the credit card bill (gas, food, entertainment, travel, medical, etc) as long as we are less than or equal to the quarterly budget. Each quarter is different as insurance and property tax come in different quarters.
Three years in, and it seems to be working.
BTW, we did this for 5 years before FIRE as well, and tracked overall annual expense back to year 2K.

 

[Floridatennisplayer]

I still don’t get the point of writing down each and every month your expenses. Unless, you are in such financial dire straits that you have to watch every single penny because you might not have enough money to cover it.

I know close enough what my expenses will be....real estate taxes, homeowners insurance, auto insurance, cable/internet. I know roughly how much we spend on groceries, gasoline, and utilities. Sure, things come up unexpectedly.....but, so what. Do you look at these spreadsheets and say...”honey, looks like you got an extra tank of gasoline this month...better quit driving so much....or the grocery costs were $13.43 more this month than last month, let’s skip a few meals next month to even that out.

Do you do it for fun? I just don’t see the point.

 

[Scuba]

I call everything at Costco, grocery stores, liquor stores, Etc CASH. I should probably break out the wine, beer, and liquor, but that would be embarrassing.

[emoji23]

 

[38Chevy454]

I still don’t get the point of writing down each and every month your expenses. Unless, you are in such financial dire straits that you have to watch every single penny because you might not have enough money to cover it.

I know close enough what my expenses will be....real estate taxes, homeowners insurance, auto insurance, cable/internet. I know roughly how much we spend on groceries, gasoline, and utilities. Sure, things come up unexpectedly.....but, so what. Do you look at these spreadsheets and say...”honey, looks like you got an extra tank of gasoline this month...better quit driving so much....or the grocery costs were $13.43 more this month than last month, let’s skip a few meals next month to even that out.

Do you do it for fun? I just don’t see the point.

That's a good point. It seems more of an exercise for information than something that is actually needed in such precision. I am in the non-specific budgeting. I just keep an eye on the total as needed. I don't worry about what I am spending on, just that at the end of the month I am staying within expected amount. I guess that is a nice perk of being in a financial situation where I do not have to watch every penny or purchase. It's not like I have to choose between a good microbrew beer and mass produced - I can have both!

 

[Sunset]

I still don’t get the point of writing down each and every month your expenses. Unless, you are in such financial dire straits that you have to watch every single penny because you might not have enough money to cover it.

I know close enough what my expenses will be....real estate taxes, homeowners insurance, auto insurance, cable/internet. I know roughly how much we spend on groceries, gasoline, and utilities. Sure, things come up unexpectedly.....but, so what. Do you look at these spreadsheets and say...”honey, looks like you got an extra tank of gasoline this month...better quit driving so much....or the grocery costs were $13.43 more this month than last month, let’s skip a few meals next month to even that out.

Do you do it for fun? I just don’t see the point.

I find it very mentally relaxing to know what we spend. I can see that we spend less than a SWR. Therefore, I have no worries about our $$$ lasting, and really it has shown me we "need" to spend more !

It does not limit what I buy or spend as it's not a budget and we are not in financial restriction.

Now that I have done it for almost 2 years, I have learned my spending in certain categories is not what I thought it would be or was.

As for the effort:
I don't get all OCD about it, so for example, when buying stuff at a grocery store, it's all groceries, even if a bottle of wine is in there. Because the inaccuracy is very small.
If I'm at Sam's and buy groceries and some big thing, I just subtract out the cost of the thing from the groceries.