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01-21-2020, 06:30 AM
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#21
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Thinks s/he gets paid by the post
Join Date: Jul 2011
Location: Reading, MA
Posts: 1,798
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I put together a detailed expense spreadsheet back around 2011 just to see what my Basic Expenses were, before deciding when to retire.
The idea was to figure out my current lifestyle cost, so I included practically everything that got paid on a recurring basis, including cable TV, internet, Netflix, and print subscriptions.
I also included $400/month for car replacement and around $150/ month for replacement of everything else that breaks.
Main thing I excluded from this spreadsheet was Recreational Travel, since that was time constrained during working years and I expected to triple that item once retired.
Anyhow, my retirement income greatly exceeds my basic expenses, so things have worked out swimmingly...
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01-21-2020, 07:37 AM
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#22
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 38,145
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That’s what I did when still working - look at the basic living expenses given current house and vehicles, utilities, insurance, property taxes, typical past expenses on health, groceries, etc. knowing that was at least a baseline cost to meet without moving or selling car, etc.
Then I doubled that for my after-tax spending “wish” budget.
__________________
Retired since summer 1999.
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01-21-2020, 08:05 AM
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#23
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2003
Location: Florida's First Coast
Posts: 7,723
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Quote:
Originally Posted by jollystomper
In retirement I track our spending by category but we do not really budget, so we no longer formally define "discretionary" vs. "non-discretionary". As long as the cash flow objectives are met, everything is good. If they are not met we *might* look at categories at that point, based on our overall situation, to determine which ones are "discretionary" and might need paying attention to.
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Pretty much what we do, all expenses are lumped together. We do not budget, or attach labels to purchases, we buy what we want or need when we want or need it. We are frugal though and try not to waste money unnecessarily, but saying that we do not go without anything we want or need. We just shop for the best prices before we buy.
The theory being that an item may be discretionary, but once purchased, it is mandatory that it is paid for.
Methinks discretionary applies to a monetary number rather than items purchased. In that case all our money is discretionary as we can choose what we pay for and when we pay for it.
However, that said, based on "others" interpretation of discretionary spending. Food and shelter become mandatory, pretty much anything else is discretional. Even then we could cut our food and shelter costs by downsizing, buying cheaper food and moving to place in Alabama, Mississippi or Louisiana, however we choose not to, that makes it descretionary.
__________________
"Never Argue With a Fool, Onlookers May Not Be Able To Tell the Difference." - Mark Twain
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01-21-2020, 08:06 AM
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#24
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2008
Location: NC
Posts: 21,304
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Quote:
Originally Posted by audreyh1
Most of our travel is discretionary, as is eating out, gifts, charity, some of our groceries and the wine, spending on hobbies, new gadgets like computers and phones and small appliances. We haven’t spent on home remodeling, but I would consider that discretionary.
I don’t consider paying for haircuts discretionary.
Most expenses relating to running the house and vehicles are non-discretionary as well as any taxes.
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Pretty similar here. To me the only value in identifying discretionary is to know what you could live on if necessary, non-discretionary, but even there you could take more extreme measures. Our discretionary is about one third of our typical spending, things we could stop immediately if needed.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57
Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
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01-21-2020, 08:16 AM
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#25
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Thinks s/he gets paid by the post
Join Date: Oct 2016
Posts: 1,512
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Quote:
Originally Posted by Katsmeow
If your struggle is to spend MORE money then I am not sure why you are interested in figuring out what is discretionary v. non-discretionary. Now, for me, I don't have that problem. I could easily spend 3 times my budget. In fact, I used to do that when I was working full time and had kids at home..
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I agree with Katsmeow and RunningBum - since you have more to spend, it's not necessary to think of your budget in this way, and it *may* be helpful to stop thinking of your budget that way.
I've kept a fairly elaborate spreadsheet budget since 1996 - and I still do - but I've never separated it into discretionary and non-discretionary, even though I'm sure my NW is lower than that of most on this site. I figured I'd cross that bridge if I came to it, and, anyway, it would be the work of at most an hour to use my spreadsheet to cut back on on non-discretionary. In fact, all my efforts on my yearly revamp of the budget were designed to re-order the items to make sure I wasn't wasting money on things I didn't care much about.
__________________
FIRED:
July 12, 2018. On safari to stay!
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01-21-2020, 09:17 AM
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#26
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Thinks s/he gets paid by the post
Join Date: Aug 2017
Location: Champaign
Posts: 4,729
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I've been keeping "total spend" records since 2015.
2015 - $63,109.34
2016 - $58,006.05
2017 - $61,532.33
2018 - $59,134.15
2019 - $57,946.83 (bought a new car, that in a different category)
I have not separated "discretionary" from "non discretionary" because IMHO all spending are moving parts. Weather changes utilities, eating habits change groceries, home maintenance changes year to year. My bottom line is year end spending. It shows our spending somewhat stable over the years but we've made drastic changes from year to year in both D and non D spending.
__________________
"Do not go where the path may lead, go instead where there is no path and leave a trail."
Ralph Waldo Emerson
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01-21-2020, 10:07 AM
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#27
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2014
Posts: 7,052
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We have our basic budget and then our discretionary spending. This includes travel, clothes, furniture, eating out, entertainment and our second car. I did quit having the cleaners when we semi retired and moved to 1400 sq ft. Only times in my life when I have turned down the heat in some rooms when I went to bed was the times we had electric baseboard heat which costs a fortune. I never bothered when we had gas heat.
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01-21-2020, 10:08 AM
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#28
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2018
Location: Tampa
Posts: 11,299
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Quote:
Originally Posted by Rianne
I've been keeping "total spend" records since 2015.
2015 - $63,109.34
2016 - $58,006.05
2017 - $61,532.33
2018 - $59,134.15
2019 - $57,946.83 (bought a new car, that in a different category)
I have not separated "discretionary" from "non discretionary" because IMHO all spending are moving parts. Weather changes utilities, eating habits change groceries, home maintenance changes year to year. My bottom line is year end spending. It shows our spending somewhat stable over the years but we've made drastic changes from year to year in both D and non D spending.
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We have only been retired for 2.5 years and our yearly totals from each year are similar to the other year.
Thus I would think even with moving parts as you mentioned, there would be something of a budget guiding your spending.
The reason I mention this aspect is that for us, the budget drives the guideline for actual spending.
So far, we have been under budget for the 2 years, but if we were going to be way over budget with an uncomfortable WR%, then I would make adjustments to the discretionary categories during the year.
Lastly, we also purchased a car in 2019, which is also extracted from a separate category which is not part of the Investment Assets, although part of NW.
__________________
TGIM
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01-21-2020, 02:24 PM
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#29
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
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I know fairly accurately what my recurring, bare-bones costs are. I don’t track the minutiae, like “bought mustard”, and don’t track discretionary beyond “restaurants”, since Visa makes it easy to track. But I know about how much I can afford to spend each year above discretionary, and one look at my savings account tells me how much is left for the year. Then it’s “ready, set, spend”!
__________________
Have Funds, Will Retire
...not doing anything of true substance...
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01-21-2020, 02:36 PM
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#30
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Thinks s/he gets paid by the post
Join Date: Aug 2017
Location: Champaign
Posts: 4,729
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Quote:
Originally Posted by Dtail
Thus I would think even with moving parts as you mentioned, there would be something of a budget guiding your spending.
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I can look at the history and immediately know in 2015 our HC premiums were $6000 for the year (premiums alone). This made me think why not go for the Bronze plan, pay $8/month with a $6000 deductible? We've been healthy and if we hit the deductible, it's the same as spending $500/month for the silver plan. Then, another year, we spent 3 weeks in Italy, so it was up a bit. Then, one year we had a really warm winter, thus utilities down.
I guess the budget is in our heads, rather than on paper. Somehow things adjust and the give and take evens out.
__________________
"Do not go where the path may lead, go instead where there is no path and leave a trail."
Ralph Waldo Emerson
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