Half Way Point - Have you checked your budget?

[aaronc879]

I'm at an average of $1330/mo thru the first half of the year. My budget is $1250/mo so not doing the greatest but i'm confident i'll get it down there. Summer electric bills are usually under $50/mo and canceling cable will save me $100/mo. I may be down to $1250/mo by the end of Septmeber.

 

[haha]

Budget?

That is my system. I never had a budget in my life, so I don't feel much need to begin now. I just try to be sure that when I spend money, I get satisfaction.

Barring really bad luck, I believe that I have a perpetual income generation system. Since my divorce, I have not had to withdraw any money from my investment accounts, beyond the monthly income falling into them. I did withdraw principle to buy my condo for cash. I did not like to do this, but it seemed like the least of various evils. The cash offer did help me close a harder bargain with a frustrated seller than I otherwise might have. In retrospect, at least with this short followup, it worked well. Two smaller, less attractive units in my same building have since sold for more than I paid for a much nicer, corner unit-and one of these was in the basement, and 25% smaller than mine.


I don't spend capital gains- although if my plan changed to one that relied more on CGs I might have to modify that.

Ha

 

[Moemg]

I am at 25% of my allotted yearly amount even with a few big ticket items ( had the pool resurfaced ,went on an expensive vacation and pre paid for another expensive vacation).So I guess I can loosen the financial reigns a little bit .

 

[MichaelB]

I need to spend a little more, it looks like.

I'll be over later to give you a hand with that. Just being neighborly, you know.

 

[dmdunca44]

I suppose we don't "need" to budget, but I do so because otherwise, DH would be afraid to spend a dime and I like knowing where the money is going, tracking trends and forecasting.

I budget monthly. For Jan through June, we spent less than came in - except for April - that month outgo exceeded income. I'm changing our withdrawal the second half of the year in order to have funds for a replacement vehicle.

 

[Lsbcal]

That is my system. I never had a budget in my life, so I don't feel much need to begin now. I just try to be sure that when I spend money, I get satisfaction.
...

The Excel file I keep is called "spending", not "budget". I'm thinking that there is a tendency for one to be too conservative in ER (my issue) so I need to keep myself honest in spending down the nest egg. DW likes to have fun and so I have to hold the reins, so to speak. It's nice to know we can afford what we're laying out. Then I can relax and enjoy the ride.

 

[Mulligan]

The Excel file I keep is called "spending", not "budget". I'm thinking that there is a tendency for one to be too conservative in ER (my issue) so I need to keep myself honest in spending down the nest egg. DW likes to have fun and so I have to hold the reins, so to speak. It's nice to know we can afford what we're laying out. Then I can relax and enjoy the ride.

The mind is a mysterious thing isn't it? I only spend about 75% of my monthly pension income and that will drop to about 60% in about 2 years when my daughter is off the books, plus I have a 2% yearly cola. You think I wouldn't have a worry in the world, but now I worry I need an emergency fund for a new car, roof, a/c, collapse of the dollar, world wide famine, etc. So I have a part time job that I don't mind to put my over imaginative mind at ease.

 

[Lsbcal]

Hi Mulligan, well bad things can happen. I have an overactive imagination too and that's why the Excel file is called "spending".

We only have to look at the obits in the local papers to remind us of our ultimate destination.

 

[W2R]

I'll be over later to give you a hand with that. Just being neighborly, you know.

Oh OK! I do need to bump it up this year. Don't get me wrong; buying nice things does make me happy if it is something that I want. That's a big "if", though.

 

[Lsbcal]

Oh OK! I do need to bump it up this year. Don't get me wrong; buying nice things does make me happy if it is something that I want. That's a big "if", though.

Don't tell us you haven't got a buy list W2R. You could always spend it on someone special in your life.

 

[haha]

The Excel file I keep is called "spending", not "budget". I'm thinking that there is a tendency for one to be too conservative in ER (my issue) so I need to keep myself honest in spending down the nest egg. DW likes to have fun and so I have to hold the reins, so to speak. It's nice to know we can afford what we're laying out. Then I can relax and enjoy the ride.

Yes, mine is called spending too. I've kept careful spending records since the mid-80s. I started with regular ledger paper, then in late 80s my older son wrote a basic program which helped very much. It was also a double entry system with chart of accounts, etc. Lately I have simplified it, and use Excel.

There are always things or experiences I would like to have, so it is important to me to keep track of outflow.

Ha

 

[scrabbler1]

Yes, mine is called spending too. I've kept careful spending records since the mid-80s. I started with regular ledger paper, then in late 80s my older son wrote a basic program which helped very much. It was also a double entry system with chart of accounts, etc. Lately I have simplified it, and use Excel.

There are always things or experiences I would like to have, so it is important to me to keep track of outflow.

Ha

I think of my "budget" more as a monitor of current and previous spending, and predictor of future spending, and less as a regulator of current spending.

 

[Nords]

I forgot to add....
Even tho I got these diamond flip flops...we'll still be on track...and I didn't have anything in the diamond budget.

I usually just spend whatever's left over in my pedicure budget...

And, yes, you WESTPAC Navy & Air Force veterans know all about those Subic Bay pedicures!

 

[pb4uski]

I think of my "budget" more as a monitor of current and previous spending, and predictor of future spending, and less as a regulator of current spending.

+1 We pretty much spend what we want to so the "budget" is more for planning purposes (what is the level of our annual living costs and how it relates to a nestegg WR) and to monitor how we are doing at a high level.

 

[obgyn65]

Interesting. I am also planning on 70k-100k annual expenses until age 95. I am quite frugal (annual expenses now : about $3k a month), and for some reason I am still worried about FIRE, probably because I am useless at budgeting.

I expect to keep total annual expenses under $70K. Once I've got a full year under my belt I will use the results to develop a budget. However I don't plan to slice and dice it into too many categories.

 

[kz]

My budget consists of spending less than I have coming in. I actually did budget expenses for years and years and just don't want to do it anymore.

 

[Meadbh]

Interesting. I am also planning on 70k-100k annual expenses until age 95. I am quite frugal (annual expenses now : about $3k a month), and for some reason I am still worried about FIRE, probably because I am useless at budgeting.

It's not that hard if you stick to the big picture. On January 1st, top up your chequing account to the budgeted amount, and pay all the bills from that account. If you run out of money before the end of the year, you are over budget!

This thread reminded me that it has been a year since I moved, and although there were certainly significant expenses, most of them were corporate. So I downloaded my personal bank records for the last 12 months and analyzed them in Excel. It turns out that I spent just over $57K, inclusive of income tax, but not including investments.

I can live with that!

 

[Sue J]

Looking at monthly income vs outgo we are doing splendidly. Monthly, we currently spend 91% of the pension payment so there's still a small cushion and then my itty bitty part-time income all goes to savings. The monthly budget includes setting aside savings for medical expenses and other non-monthly expenses. The utilities are all within estimates (next months electric bill for all this A/C will be HIGH!) and I've changed how we get our prescriptions and saved a lot since January.

I posted that quote on 6-29-12.

This week we got a letter about our health insurance. Our health care plan is through DH's pension. It's subsidized based on his years of service and the subsidy has been quite generous and we had a choice of 3 levels of insurance. Since he retired in 2010 we've chosen the lowest cost plan with the highest deductible. We have few doctor's visits and cheap generic prescriptions. This has worked just fine for us.

The letter announced that the low cost, high deductible plan will no longer be offered as of Jan., 2013 and we all have to accept the "Enhanced Plan" with low co-pays and low deductible but a MUCH HIGHER monthly cost.

The impact to our monthly expenses is about $400/month. This is so disappointing as the low cost plan was just fine for us. This will eat up our entire monthly cushion and a good hunk of my part-time income.

Our options are to accept this or drop all coverage which really is no option at all as this is still much less cost to us than a private policy would be.

This change is only for 2013 because starting in 2014 the pension plan is dropping all coverage for spouses of retirees. There will be no subsidy and no ability for spouses to have access to insurance, even if the spouse pays the full premium amount. DH will still have coverage with a subsidy but I'm certain the costs will go up. So I'm hoping that Obamacare really happens in 2014.

The pension plan says that the pension is secure, but that the health care fund is unsustainable. They say they are working to keep health care for the retirees, yada, yada, but spouses are just excess baggage.

So 2013 will look different for us, budget wise. I can make it work, but it gets me mad that other people make decisions (no more options on insurance levels) and it impacts my bottom line to the tune of $400/month. We are grateful to have insurance and the subsidy for as long as we have it. It's just very disappointing to not be able to have a high deductible/low cost option next year.

 

[Alan]

Sorry to hear this Sue. Retiree Health costs is one of the least stable budgetary items for us as well. (we also ER'ed in 2010).

 

[easysurfer]

I posted that quote on 6-29-12.

This week we got a letter about our health insurance. Our health care plan is through DH's pension. It's subsidized based on his years of service and the subsidy has been quite generous and we had a choice of 3 levels of insurance. Since he retired in 2010 we've chosen the lowest cost plan with the highest deductible. We have few doctor's visits and cheap generic prescriptions. This has worked just fine for us.

The letter announced that the low cost, high deductible plan will no longer be offered as of Jan., 2013 and we all have to accept the "Enhanced Plan" with low co-pays and low deductible but a MUCH HIGHER monthly cost.

...

I'd expect what you experienced is probably the norm and not the exception. Brings back memories to when I FIRE'd (was back in early 2008). Even then companies were shifting the costs to employees/retirees. At the megacorp I was in, for active employees, an HMO option was dropped. Old fashioned health care (co-pays, deductibles) got increased a lot. Megacorp was steering folks to HSAs which most folks didn't like.

As for me, I had planned all alone to go with the HSA in preparation to when I'd make the "I'm outta here" exit plan.

 

[Katsmeow]

The letter announced that the low cost, high deductible plan will no longer be offered as of Jan., 2013 and we all have to accept the "Enhanced Plan" with low co-pays and low deductible but a MUCH HIGHER monthly cost.

The impact to our monthly expenses is about $400/month. This is so disappointing as the low cost plan was just fine for us. This will eat up our entire monthly cushion and a good hunk of my part-time income.

Our options are to accept this or drop all coverage which really is no option at all as this is still much less cost to us than a private policy would be.

This change is only for 2013 because starting in 2014 the pension plan is dropping all coverage for spouses of retirees. There will be no subsidy and no ability for spouses to have access to insurance, even if the spouse pays the full premium amount. DH will still have coverage with a subsidy but I'm certain the costs will go up. So I'm hoping that Obamacare really happens in 2014.

Ouch! This is exactly what I worry about as I am covered on DH's retiree coverage and we have a high deductible plan. The regular PPO claim is over $700 a month higher! So far, they have made not any change but I do worry about it, and I know that even though we've seen so signs of it they could always drop spouse/dependent coverage.