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Old 01-02-2021, 08:58 AM   #101
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Well, that was a surprise. I looked at some year-end numbers today, and...

2020 was a good year. Huh

Disclaimer: I'm retired and currently getting by on a fixed pension. Obviously many, many people had a horrible year and I feel for them. I have helped where I could.

I budget pretty closely. Most years since retirement I've been within $600 of my budget. 2020 came in WAY under budget because:

- We had the $2,400 stimulus check (2 of us)
- Travel expense were down a little. But really, not much. We travel on our boat, so naturally self-isolate.
- Last year I did a few boat delivery gigs which added a little to the kitty.
(And, as a "transportation worker," I got to travel a bit while everyone else was locked down, plus get paid for it.)
- Someone rear-ended my car and their insurance gave me $1,500 more than it cost to fix.
- Inflation has been low.

All told, just a few $K over budget, but it's welcome news. I worry about inflation forcing me to dip into cash reserves, my 401k or a second (much smaller) pension that I'm holding back, before I'm ready to. The longer I can hold off the better. I'm so far over 100% on FireCalc now that I worry much less.

I have to admit that the timing of the pandemic, despite the awful death and destruction, probably helped me financially. Even my 401k has outperformed. It's been on a strong upward trajectory since 2009.
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Old 01-02-2021, 09:02 AM   #102
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We have never had a budget or tracked any expenses in my 40 plus years in the work force. Just like others we knew what we could afford LBYM and followed our gift of not spending just to spend.
I did look and see what we spent for this year and it is a ball park not exact number but it was in that 150K range. I hope that number goes down this year and we don't see any incidental expenses this year. I don't like surprises when it costs me money. Lol
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Old 01-02-2021, 09:06 AM   #103
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We spent 32% less than in 2019 primarily due to decreased travel and less dining out. We hope to make up for it in 2021!
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Old 01-02-2021, 09:35 AM   #104
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Kudos for managing to report everything in $USD, hehe!
Yeah, HMRC publish an average exchange rate every month so I use this to convert s to $s. Our IRS return has to be in $s and our HMRC return has to be in s so it has become 2nd nature to record income and outgoings in both currencies. Between my wife and I we have 4 US pensions and 4 UK pensions plus interest, dividends etc from both countries.
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Old 01-02-2021, 11:00 AM   #105
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For our first year in RE:
Our essentials are same as last year.
Gifts to kids are same.
Donations to charities are up.
A new car plus a few smaller lumpy items.
Travels are down, like most people.
Overall, first year in RE spending is within forecasted budget.
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Old 01-02-2021, 11:17 AM   #106
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Originally Posted by street View Post
We have never had a budget or tracked any expenses in my 40 plus years in the work force. Just like others we knew what we could afford LBYM and followed our gift of not spending just to spend.
I should have mentioned in my post above that I don't really budget either. I do look at how much I spent at the end of each year. Shortly after my anticipated pension exceeded that number I retired.

So when I say I'm "on budget" that just means I didn't spend any more than usual over the course of the past year. After so many years of LBYM it becomes second nature. No need to pour over spreadsheets unless there's a large, unexpected expense.
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Old 01-02-2021, 11:27 AM   #107
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We don't 'budget' either; we don't need or want much, and we're inherent non-spenders. But if we do want/need something we get it.

Tracking expenditures is easy; condo fees/property taxes/utility bills, etc, are easy to record, most spending is done with Visa/Mastercard, and the little cash we use is withdrawn from our bank's ATM.

So a small spreadsheet is sufficient for yearly totals.
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Old 01-02-2021, 11:32 AM   #108
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It's just how I track it Family of 5, 2 in college, 1 HS MCOL


Gas 1,083
Mortgage 13,188
Prop Tax. 5,889
Restaurants 983
Groceries 10,976
Home&Car Ins 2,254
Everything Else 24,853
College 20,235

Total Spend 79,461


Sorry, couldn't figure our the table feature.
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Old 01-02-2021, 02:33 PM   #109
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2020 is my last year practicing a retirement budget. It's gametime starting in April. Here's 2020 spending and my retirement budget. I think I'm in good shape, but would appreciate any thoughts.

Category2020 ActualRetired Budget
Housing - Taxes, Ins, Upkeep$4,244$4,800
Utilities$3,277$4,620
Groceries$9,043$9,000
Health - Company Insurance$4,165$12,000
Cars - gas, maint$1,382$4,800
Insurance - cars, toys, umbrella$2,877$4,500
Entertainment - events & eat out$2,605$4,800
Travel$2,331$6,000
Gifts$2,042$1,500
Charity$12,000$7,200
Discretionary Me$2,559$3,600
Discretionary DW$4,003$3,600
Pets$600$900
Kids / Grandkids - ugh!$4,203$2,400
No category$936$1,500
Lumpy$0$6,900
Total$56,267$78,120
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Old 01-02-2021, 02:35 PM   #110
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2020 was about 3% more than 2019. Pretty average overall. Next yr budget is a little less, unless we really do get the pandemic behind us. If we get past all this in 2021, I'll be BTD.
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Old 01-02-2021, 03:49 PM   #111
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Quote:
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Yeah, HMRC publish an average exchange rate every month so I use this to convert s to $s. Our IRS return has to be in $s and our HMRC return has to be in s so it has become 2nd nature to record income and outgoings in both currencies. Between my wife and I we have 4 US pensions and 4 UK pensions plus interest, dividends etc from both countries.
I have a hard time with my tracking software when I get another currency out of the ATM while traveling...square peg in a round hole, but I slam it in there!

As to the topic of the thread, as many have said, never had a "budget", but that's not to say I don't track expenses. I've done that since 1981, when I got my first IBM PC. Doing the year-end report is something I don't really like to do, so I don't do it right away. I let all the statements come in and get reconciled so I don't have the unrecorded transaction or two pop-up, then "have to" do the report again.
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Old 01-03-2021, 06:08 AM   #112
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I've decided to try to track expenses better in 2021. I'm struggling with how to keep categories separate. I look at the cc statement and see 6 charges from Amazon. some were household goods, some gifts. Same with farm store, dog food vs. A box of drywall screws. How do those of you that track categories keep things straight?
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Old 01-03-2021, 06:43 AM   #113
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I've decided to try to track expenses better in 2021. I'm struggling with how to keep categories separate. I look at the cc statement and see 6 charges from Amazon. some were household goods, some gifts. Same with farm store, dog food vs. A box of drywall screws. How do those of you that track categories keep things straight?
Easy. Just track the categories as you buy the stuff, instead of looking at credit card statements long after the purchase. Then you will know exactly what it is.
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Old 01-03-2021, 07:59 AM   #114
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I'm a numbers person and a bit of a financial control freak so I track spending by category and also have a monthly budget for normal expenses- the more predictable bills, plus additions to funds for medical expenses, home repairs, charity, property and income taxes, insurance, and a "slush fund".

Overall, I'm happy if my W/D rate is under 3.5% and I managed that even last year when I bought a new car. I monitor categories but am not obsessive about fluctuations between years as long as my total spend is manageable. I mostly like to be able to assure myself that if I had to cut back in a bad year, there are areas I could do it without too much pain- mostly travel and charity. In 2020, as with many here, travel was way down and charity was up.
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Old 01-03-2021, 08:06 AM   #115
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I've decided to try to track expenses better in 2021. I'm struggling with how to keep categories separate. I look at the cc statement and see 6 charges from Amazon. some were household goods, some gifts. Same with farm store, dog food vs. A box of drywall screws. How do those of you that track categories keep things straight?

I don't track things finely, particularly for small expenses. With Quicken, I don't mix up expenses at Home Depot with what I spent at Costco. That's generally good enough.

If I buy an air-fryer at Costco along with the normal grocery, it's OK to call the whole receipt "grocery". Quicken allows me to split out the Costco receipt to different categories, but I do not bother to do that unless it's a big enough item.

When I go on a cross-country RV trip for 2 months, all the gas station receipts in that travel time go into "travel fuel cost". The idea is to see later how many thousands of dollars I spent on gas, to satisfy my curiosity. It's not the same as misclassifying a few bucks I spent at Walmart.
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Old 01-03-2021, 08:42 AM   #116
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We stopped detail tracking 5 years ago when we realized that it made no difference to our spending. Now we just track total net worth including all assets and income/expenses but we keep fixed assets at cost (no mark to market).

In 2002, it grew by +13.84%, well above our planned +6%. We ratcheted back on travel and eating out. We did do more take-out though. And we reduced our communications costs.
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Old 01-03-2021, 08:43 AM   #117
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I've decided to try to track expenses better in 2021. I'm struggling with how to keep categories separate. I look at the cc statement and see 6 charges from Amazon. some were household goods, some gifts. Same with farm store, dog food vs. A box of drywall screws. How do those of you that track categories keep things straight?
We have a pretty detailed Quicken (expense) "category" setup. For example - an expense category for household goods. Another for gifts. Another for pets. etc. And dozens of other categories covering everything we spend $$ on. I even just created a new category called "Art Supplies" as wife is getting into Watercolor painting and we're buying all sorts of stuff for that. But you can do the same thing via a spreadsheet or other tool if you don't use Quicken or a comparable program.

One thing I like about Quicken is that it has a "split transaction" feature. So, when I buy multiple items in one purchase from Amazon, Kroger, etc, I simply go through my receipt and assign the different cost to different expense categories (eg: household goods, groceries, non-prescription medicine, libations, etc).

I tend to be pretty detailed, so even have a separate Sales Tax category and break that out as well. Not many people probably do that, but I like to understand the real cost of items vs. the tax on those items..
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Old 01-03-2021, 08:56 AM   #118
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I mentioned income taxes in a recent post in this thread. How do you handle income taxes when it comes to categorizing expenses for a given year? Income taxes are sometimes paid in the year the income is earned, such as through withholding or same-year estimated tax payments. But income taxes may also be paid in the year after the income is earned, such as when filing an income tax return or when 4th quarter estimated income taxes are paid in early January of the following year. If these amounts are roughly the same from year to year, it won't matter too much how they are counted. But with my big income spike in late 2019, I paid all of the taxes in early 2020 which represented nearly 2/3 of my entire taxable income for 2020!

And how are you classifying the federal stimulus payments? After some thought, I will classify them as an offset to (federal) income taxes paid, like a tax credit, especially if I am not getting the check separately and instead filing to receive the money through my federal income tax return (which is what I will be doing for the most recent one).

Also mucking up my spending categories will be the ACA premium subsidy. I treat the entire subsidy, not just what I realized with my monthly HI premiums, as an offset to my medical expenses. Between the additional ACA subsidy and the stimulus money, they will more than erase my 2020 income tax liability and cause me to get a refund for the first time in at least 15 years. Therefore, I can't really determine my actual net medical expenses until I file my federal income tax return.
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Split Transactions
Old 01-03-2021, 08:57 AM   #119
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Split Transactions

Most of the time, I don't bother to split, since it really doesn't cause anything different to happen. So if the category is "groceries with the occasional appliance", that's ok. But I'd probably have split that one, since I'd just guess at the appliance cost, plus tax, and it would only take a few seconds.
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Old 01-03-2021, 09:08 AM   #120
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The wife and I don't budget, per se, we use more of a SWAG approach. Last year we spent $6,000 more than in 2019. ($81,500 vs $75,000). 20% of the spending was to help our daughter out with some home remodeling, new kitchen and paver patio, so our actual spending was about $15,000 less then 2019.
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