2013 expenses

[joeprintz]

Seems realistic except- is the vacation for one as that seems like a very low travel/vacation budget.

 

[supernova72]

No, thought about it but was just having too much fun here! So, I chose to stay in New Orleans this year. If I had taken a vacation, most of it such as airfare and hotel costs would have gone in Misc. or maybe a new "Vacation" category. But still, the food would have gone into Restaurants, and gas into Gasoline, vacation clothing into Clothing, and so on.

______

Got it. I'm not retired but in my so called plan I have a line item for vacations thinking early on I'd like to do that. There are times I think I like planning the trips more than actually going

Been to New Orleans so once and the fun meter was pretty high so enjoy!

 

[Cassie]

Seems realistic except- is the vacation for one as that seems like a very low travel/vacation budget.

Yes, this is for one. I'm starting off with $8000 in the vacation bucket already. Most of them are to Las Vegas & Louisiana...rooms comped & airfare to Louisiana comped. My bankroll comes out an already established bucket.

 

[Throwdownmyaceinthehole]

Yep, and we buy NO junk food, very little processed and hardly any soda. Lots of fruit and veg, salmon. Hubby can still run a 20 minute 5k at 60, me not so much. He has been doing all the shopping as I was still working, and he buys whatever..and never looks at sales or prices. Wine is our big expense, hate to admit it, but the two of us go thru 5-7 bottles a week, so that's around $100 a week, yikes, but it keeps us happy!

 

[W2R]

I have a budget however I never figured out what I've spent. This thread prompted me add up my annual projected expenses for 2014 based on my monthly budget. Health insurance will be taken out of my pension check. Do you guys save receipts or log everything spent on a daily basis, what's a good way to track expenses? I'm thinking as long as I stay within budget I'm doing ok. Thanks

I don't have a budget and do not need/want one right now. Still, I am recording everything I spend out of curiousity. I want to know exactly where every cent of my money is going! Although it may seem a little OCD, for some reason this is my idea of fun.

I log everything I spend in cash on a daily basis, and "balance" my wallet in the evenings so that I know where every penny of my cash from the ATM goes to. I used to just put down "ATM", but now I record everything very specifically, to the penny.

As for the checks, debit card transactions, and automatic bank deductions, etc, I get all that online from my bank account and log it as well. Then I balance my log with my bank account, to make sure I didn't miss anything spent.

I want to know the REALITY of what I actually spent, so I don't spread the costs for big ticket items over years (like one might for a budget) unless that is how I actually paid for them. I don't do any other trickery. If the money was spent, it is recorded and that is that. So, some years (like this year), my spending is much higher than other years.

I record absolutely everything, including income tax payments although I choose not to divulge my income taxes here.

 

[Meadbh]

I have a budget however I never figured out what I've spent. This thread prompted me add up my annual projected expenses for 2014 based on my monthly budget. Health insurance will be taken out of my pension check. Do you guys save receipts or log everything spent on a daily basis, what's a good way to track expenses?

I set up an Excel spreadsheet using one of the budget templates and customized it for my needs. Within each category there are subcategories, e.g within Housing there is property tax, utilities, maintenance, etc. The sub totals for each category are helpful. On the left side of the spreadsheet I added a column for the amount I budget annually for each expense. I have a column for each month. On the right side of the spreadsheet I put a column for cumulative spending for each category (YTD) and another column showing the current variance from expected spending. At the bottom I separate out taxes, investments, debt servicing and personal expenses. I enter data monthly and all calculations are automatic. The data inputs come from purchase receipts, which I collect in a Ziplok bag for the current month, and from credit card and banking records, which I print at the end of the month. I shred all the paper after doing the calculations, unless I need to keep a receipt for tax or warranty purposes. For 2014, I will simply make a copy in a new worksheet and delete the numbers. I will adjust the budget for each category based on experience.

 

[arky]

I have a budget however I never figured out what I've spent. This thread prompted me add up my annual projected expenses for 2014 based on my monthly budget. Health insurance will be taken out of my pension check. Do you guys save receipts or log everything spent on a daily basis, what's a good way to track expenses? I'm thinking as long as I stay within budget I'm doing ok. Thanks

Yes, i log all expenses on almost a daily basis. I use Quicken (there are many other products available) and since virtually 100% of all expenses go through my checking account, it is really easy to track them. I have been lucky enough to not need a budget so far (retired 6 years). I just spend what I want/need to and then see how it all works out in the end. I've averaged ~45K per year since retiring.

 

[Amethyst]

I don't think anything counts as OCD until it starts interfering with your enjoyment of life and your personal relationships, so you're safe

I started "capturing" our daily expenses after joining the ER forum 5 years ago. Kind of a pain at first, until I saw the benefits. Now it's like a muscle I exercise once a month. Over time, the "MISC" category has gone down, as I resolutely assigned each expense to a category. To be honest, I don't believe in "MISC," and feel I'm being lazy when I use it

Income tax is by far our largest expense, so I definitely record that!

Amethyst

I want to know exactly where every cent of my money is going! Although it may seem a little OCD, for some reason this is my idea of fun.

I log everything I spend in cash on a daily basis, and "balance" my wallet in the evenings so that I know where every penny of my cash from the ATM goes to. I used to just put down "ATM", but now I record everything very specifically, to the penny.

I record absolutely everything, including income tax payments

 

[beowulf]

I applaud those who can live comfortably spending $20 -$30K a year. I don't know how they do it, but it's totally amazing. In many cases, it's hard to tell if this is done out of necessity (low earnings) or just extreme frugalness. I would hate to start having to hang used paper towels out to dry and buy week old bread and dented cans (as on one of the really cheapskate websites). If you have to, then there is no choice, but I wouldn't do it just to save for the future.

Another area many omit is taxes. We do live in the East in a high cost area. Last year was my first full year of retirement (meaning no salary at all) and our total tax burden, to include federal and state income, real estate and personal property (not including sales tax) is close to $38K. To that sum we add other must spend areas such as mortgage, health care (Medicare for 2 plus FEHB), gas, electricity, etc. We have no car payments and are nearing the end of our 15 year mortgage. W2R and Cassie have a great lists to plug numbers into. I'm just afraid to do it . But I do track all spending. And then ignore it .

And our first year of both of us being retired was a blow out travel year - trips to AU, NZ, several of the South Sea islands and Europe, as well as cross country US travel. And 2014 looks to be about the same. We figure we have about 5 to 7 years of unhindered (both physically and economically) travel, before things catch up with us. Our motto is "Having fun while spending the kid's inheritance. " And, if the market continues (unlikely) as it has been, we will have negative SWRs - as in, our total invested (not counting home) went up about 12% from last Dec 31, even counting all withdrawals. How do you determine SWRs when you have a lot more than you started out with ?

I love reading these posts - happens at least once a year, about this time. Keep them coming. And our wishes for everyone on ER to have a wonderful New Year.

 

[Danmar]

I set up an Excel spreadsheet using one of the budget templates and customized it for my needs. Within each category there are subcategories, e.g within Housing there is property tax, utilities, maintenance, etc. The sub totals for each category are helpful. On the left side of the spreadsheet I added a column for the amount I budget annually for each expense. I have a column for each month. On the right side of the spreadsheet I put a column for cumulative spending for each category (YTD) and another column showing the current variance from expected spending. At the bottom I separate out taxes, investments, debt servicing and personal expenses. I enter data monthly and all calculations are automatic. The data inputs come from purchase receipts, which I collect in a Ziplok bag for the current month, and from credit card and banking records, which I print at the end of the month. I shred all the paper after doing the calculations, unless I need to keep a receipt for tax or warranty purposes. For 2014, I will simply make a copy in a new worksheet and delete the numbers. I will adjust the budget for each category based on experience.

Very similar to our approach. Three main sections 1) income. 2) Expenses the net cash flow ties into our balance sheet each month. Reconciling cash balances and paying the credit cards is called budget day. We actually enjoy it. Always working on the current year plus two more into the future. I work at the summary level while my assistant keeps the sub-ledgers(credit cards).
My accounting background has really come in handy in retirement.

 

[jollystomper]

To the OP, our expenses are a little higher but we had some non-repeating expenses (most of which we planned for) this year:
- Gifts for 7 high/school college graduations among our kids, nieces and nephews
- Buying a new used car to replace a 13 year old car.
- Additional "vacation" travel due to helping with an ill relative (since they live in Florida we were able to do some fun things as well, so we put the trips in the vacation category).
- Replacing our 18 year old heat pump, and having to dug up and replace a well line..
- Our youngest child starting college.

According to Quicken, these 11 categories accounted for 91% of our expenses: taxes (32%), charity (11%), auto (10%), household (9%), college (6%), groceries (5%), gifts (5%), medical (4%), mortgage (4%) vacation (3%), utilities (3%). Based on anticipated changes our expenses target well for future RE.

 

[Marita40]

This last year I recorded money spent each day. I did find it a little OCD. For the coming year I'm going to try it bi-weekly. I'll just throw all receipts into a box and record them then.

I mentioned above that I spent about $30,000. this year, excluding taxes and mortgage. This included such relatively expensive things like my LTC premium, condo association fees, and high out of pocket medical/dental bills. Although I was relatively frugal (ie. careful) I could certainly have made that amount lower by not giving to charity, not buying clothes, not eating out, etc. Sadly, I've gained that "Starbucks latte" effect of needing my daily designer java fix, a bad habit! But so much depends on where you live--I'm in the Midwest and you can live pretty cheaply here. Besides eating out I spend virtually nothing on entertainment and have no expensive hobbies. Plus I mostly walk or bike to work, so I drive less than 2000/miles per year. Just lots of variables in all our stories!

 

[Alan]

I don't have a budget but I do track our income (pensions plus withdrawals from savings), and I do track how much we spend each month. Some categories I do break out so I can see what we spend, such as rent, utilities, taxes and healthcare costs. As long as we are spending well below our means I don't have the desire to track more closely than that. Been there, done that, but I can see why some folks need to track expenses closely and why some folks enjoy tracking their expenses closely.

 

[dm]

We are at $98,000 this year. That's for two of us, 56 and 52. Retired now for 7 years. This is close to what I expected, no mortgage or loans.

Health insurance cost are close to $15,000. The airplane cost about $20,000, much less than last year when we bought it. We also spent $13,000 on car expenses.

We have been spending between $75,000 and $100,000 per year since we retired. I don't see this changing anytime soon, but we could if needed.

 

[dm]

I don't have a budget but I do track our income (pensions plus withdrawals from savings), and I do track how much we spend each month. Some categories I do break out so I can see what we spend, such as rent, utilities, taxes and healthcare costs. As long as we are spending well below our means I don't have the desire to track more closely than that. Been there, done that, but I can see why some folks need to track expenses closely and why some folks enjoy tracking their expenses closely.

I started tracking 5 years before I retired and have just kept doing it. I'm much more interested in keeping track of my net worth. As long as it is in good shape the spending is not that big of a deal.

 

[Alan]

I'm much more interested in keeping track of my net worth. As long as it is in good shape the spending is not that big of a deal.

Exactly

 

[FIREd]

Our expenses are pretty high since we live in San Francisco rent and pay high income taxes.

Our gross income was spent as follows in 2013: 35% went to Uncle Sam and California, 41% was saved, and 24% was spent (half went to rent). Compared to 2012, our income is up 11%, our taxes are up 25%, and our spending is down 20%. Since our rent and HI increased this year, most of the decrease in spending comes from discretionary expense cuts. Our discretionary spending is already the lowest since 2004 but that trend will likely continue in 2014. We expect another large rent increase in April and marginally higher taxes in 2014 and that money has to come from spending in order to maintain our savings rate.

47.2% - Housing
9.8% - Groceries
6.4% - Auto (including replacement fund)
5.4% - Utilities
2.5% - Health care
2.0% - L&D insurance
0.5% - Pets
26.2% - Discretionary

 

[audreyh1]

We track expenses in detail and have for decades - as Quicken allows us to do easily. And our "budget" is based on our typical spending. We set a budget for planning purposes, but nothing is in stone. It doesn't matter if we exceed it as we have "extra" funds set aside for splurges.

 

[martyb]

We haven't really tracked expenses yet, but may in the future. I know how much we earned for the year, and how much we have left...pretty much zero! So that kind of narrows it down, I guess. Once I retire this year (2014) my pension won't be taxed by the state, but wife's will until she decides to join me in retirement (probably 2-3 yrs). What I DO know is that my net retirement income (from pension) will be around $8000 more per year than I currently net while working, due to the fact I'm currently maxing my TSP + catch-up. Once I do retire and begin drawing the extra $8000, wife will increase her 401k contributions until she does retire, which will mean in effect our net will remain the same as it is now. She has no pension so only her 401k, which isn't going to be that much. Fortunately, shortly after she retires, my military retirement will begin, which will replace a good chunk of her former pay. Hopefully until she retires, we won't touch any of our savings portfolio.

 

[Danmar]

I started tracking 5 years before I retired and have just kept doing it. I'm much more interested in keeping track of my net worth. As long as it is in good shape the spending is not that big of a deal.

I agree. Our budget is really more of a forecast than a budget. We always exceed the "budget" which has a fair bit of cushion to start with. Net worth is pretty easy to track just by looking at any number of internet portfolio trackers. I doubt anyone would start tracking expenses in this buoyant market, but I remember in 2008 when we indeed used our "budget" to temporarily reduce expenses.
In any event been doing it for so long it seems normal and at this stage I couldn't stop even if I wanted to. Go figure.

 

[REWahoo]

We haven't really tracked expenses yet, but may in the future. I know how much we earned for the year, and how much we have left...pretty much zero! So that kind of narrows it down, I guess.

Just a wild guess (see my sig line), but I suspect if you subtract taxes and savings from your earnings figure you'll have good idea of what you spent.

 

[Mulligan]

I applaud those who can live comfortably spending $20 -$30K a year. I don't know how they do it, but it's totally amazing. In many cases, it's hard to tell if this is done out of necessity (low earnings) or just extreme frugalness. I would hate to start having to hang used paper towels out to dry and buy week old bread and dented cans (as on one of the really cheapskate websites). If you have to, then there is no choice, but I wouldn't do it just to save for the future. Another area many omit is taxes. We do live in the East in a high cost area. Last year was my first full year of retirement (meaning no salary at all) and our total tax burden, to include federal and state income, real estate and personal property (not including sales tax) is close to $38K. To that sum we add other must spend areas such as mortgage, health care (Medicare for 2 plus FEHB), gas, electricity, etc. We have no car payments and are nearing the end of our 15 year mortgage. W2R and Cassie have a great lists to plug numbers into. I'm just afraid to do it . But I do track all spending. And then ignore it . And our first year of both of us being retired was a blow out travel year - trips to AU, NZ, several of the South Sea islands and Europe, as well as cross country US travel. And 2014 looks to be about the same. We figure we have about 5 to 7 years of unhindered (both physically and economically) travel, before things catch up with us. Our motto is "Having fun while spending the kid's inheritance. " And, if the market continues (unlikely) as it has been, we will have negative SWRs - as in, our total invested (not counting home) went up about 12% from last Dec 31, even counting all withdrawals. How do you determine SWRs when you have a lot more than you started out with ? I love reading these posts - happens at least once a year, about this time. Keep them coming. And our wishes for everyone on ER to have a wonderful New Year.

You never know what causes some people to do it (out of necessity or just extreme frugalness). I noticed my dad who is almost 80 sawing his paper towels in half to economize. Then when I was painting his house in the kitchen pantry I pulled out a 2 year supply of canned food. His response was you can't afford to buy food except when it is on sale. So then I really start thinking and ask if he is having money problems. He saved yes they can't save like they used. Down to saving only $1000 a month. Oh and did I mention he has 1 million in assets, paid off vehicles and house, and lives only on pension and SS, and started complaining about forced 401k withdrawals that he doesn't need... He isn't going to change so I'm not going to bother. But I do know he will never run out of money no matter what is going on in his head.

 

[truenorth418]

I am single, no kids, live in NYC. In my 2 full years of retirement I have yet to spend as much in 1 year as any year I was working. In 2013 I will come in almost 10% under budget. Here is the tally with two days left to go:

MEDICAL/DENTAL INSURANCE (COBRA) 3,600.
MEDICAL/DENTAL EXPENSES 2,493
CONDO MAINTENANCE/TAXES 6,918
INSURANCE HOME/UMBRELLA 1,087.
AUTO/TRANSPORTATION 3,993.
CLOTHING 625.
GYM 785.
GIFTS 1,048.
GROCERIES 4,060.
LAUNDRY 175.
CABLE 690.
GAS & ELEC 492.
PHONE 1,135.
ENTERTAINMENT/MISC 3,909.
TRAVEL 10,957.
INCOME TAXES 3,768.

TOTAL $45,635.

Looking ahead to 2014 I am planning to spend less on medical insurance and transportation - and much more on travel.

 

[scrabbler1]

I applaud those who can live comfortably spending $20 -$30K a year. I don't know how they do it, but it's totally amazing. In many cases, it's hard to tell if this is done out of necessity (low earnings) or just extreme frugalness. I would hate to start having to hang used paper towels out to dry and buy week old bread and dented cans (as on one of the really cheapskate websites). If you have to, then there is no choice, but I wouldn't do it just to save for the future.

I don't hang used paper towels out to dry or anything else like that. I live in a high-cost area (Long Island, NY) and my annual expenses for 2013 are just under $19,000. I am single with no kids and no debts. I live in a studio apartment in a large co-op complex which is run very well (maintenance has gone down from 2012 to 2014) and have lived here for nearly 25 years. I own a 6-year-old car which replaced one I had owned for 15 years and averaged about 3,100 miles per year (so my current one should last me at least 10 more years).

I have local, low-cost hobbies including volunteer work and I don't like to travel after all those working years with an awful commute burnt me out from travel.

My expenses will rise a bit in 2014 because I will be switching from a cheap, non-compliant HI plan I never really wanted to a broader one (Silver) I do want. That will add about $1,500 to my expenses, hardly a dent to my finances but will give me more peace of mind.

In my ER preparation, I had always predicted annual expenses in the $18k-$22k range, and that was in 2008 before Obama won and the ACA became a reality.

 

[Sue J]

I keep track of spending in a simple Google Documents spreadsheet. My spreadsheet has just 3 columns - Groceries, Gas and Other. I use Google Documents so that DH has access to it from his computer. He has not looked at any of it for over 4 years. I keep track just with receipts, if DH has bought something he leaves the receipt on my desk and I record it in the spreadsheet.

All other categories are fixed amounts paid monthly automatically or one payment that may vary (city utility bill) so I don't need to keep track of ongoing spending in those categories.

At the end of the month I put it all (fixed monthly expenses and the Groceries/Gas/Other totals) together in one spreadsheet along with income and savings. This one just looks like a list with income at the top and totals for the bills and spent categories subtracted. Very easy. I keep a template for this and just plug in the amounts for the month.

I'm the type that ENJOYS doing all this, I know many people think of it as a chore or "work".

I like getting to the end of the month and seeing that income exceeded expenses and that we've saved something for the next rainy day.