Budget Review Frequency

[Jerry1]

How often do you review your budget? I just retired and I feel the need to review my budget. This is frankly, something I've never done before. I would make money, save money, and at year end, I'd review my change in net worth.

Now that I'm retired, I feel the need to review monthly. I suspect that this will turn into quarterly and then annually as time goes on. Looking for some input from the group on how often you review your budget to actual and does it indeed lessen over time?

 

[Live And Learn]

I retired nearly 3 years ago. I review my expenses quarterly and log them in a spreadsheet. I look to see where I am either under / over and try to understand the driver of the variance. During 4Q I look to take advantage of large underbudget variances by making "out of budget" purchases. 1st year it was a hot-tub. 2nd year it was a small boat. Review your budget as often as you feel comfortable. You'll find your own sweet spot.

 

[SecondCor521]

I don't budget.

I do track all spending. I also make sure I'm under a 4% withdrawal rate very (too) frequently. Lately that's been about once or twice a week. At the same time I verify that I'm meeting all of my other financial goals (do I have enough cash on hand, do my kids' college funds have enough in them, is my asset allocation where I want, etc.)

I do think your thesis about checking less as time goes on is true for most and will be true for me also.

 

[audreyh1]

How often do you review your budget? I just retired and I feel the need to review my budget. This is frankly, something I've never done before. I would make money, save money, and at year end, I'd review my change in net worth.

Now that I'm retired, I feel the need to review monthly. I suspect that this will turn into quarterly and then annually as time goes on. Looking for some input from the group on how often you review your budget to actual and does it indeed lessen over time?

Annually to look at where the overall spending went.

Quarterly more or less to see how the total spending is on track versus the total budget. Only break out travel, gifting, and special expenses at this level.

 

[bingybear]

I came up with a proposed budget a year before RE. (4 years ago). I track my health expenses (need for HSA) and anything needed for taxes. I don't track other spending. I haven't revisited the budget since I put it together.

I'm now playing with understanding how larger roth conversions would affect us. That will screw up the budget that I ignore.

 

[Aiming_4_55]

I'm not retired yet and check my spend semi-annually.

If you are checking your budget more frequently...congrats, its a new hobby for you in retirement. Nice to have extra free time.

 

[pb4uski]

I don't budget.

I do track all spending. I also make sure I'm under a 4% withdrawal rate very (too) frequently. Lately that's been about once or twice a week. At the same time I verify that I'm meeting all of my other financial goals (do I have enough cash on hand, do my kids' college funds have enough in them, is my asset allocation where I want, etc.)

I do think your thesis about checking less as time goes on is true for most and will be true for me also.

Similar story here. When I retired I had a pretty robust budget. For the first few years I updated it annually. I'm not sure when I last updated it.

While I do keep track of spending in Quicken, I hardly ever compare it to budget. In my case, the budget was to get comfortable with our total living costs for a year.

 

[W2R]

I track my spending pretty much every single day, and then at the end of each month I look at how much I spent in each category and project what my spending will be by the end of the year.

I probably spend too much time on tracking my spending, but it is fun for me.

 

[Meadbh]

I have been retired for over 5 years. Prior to ER, I had developed a detailed budget spreadsheet, including a cumulative variance column. I tracked all expenses by category and subcategory monthly for the first three and a half years. By that point, I had a pretty good idea of my spending patterns, so I discontinued the monthly budgeting exercise. I continue to calculate NW and WR annually and have kept WR in the 3-3.3% range until this year, when I have been blowing that dough.

 

[Cat-tirement]

Don't have a budget per se, just a total annual spending target determined from many years of detailed spending data in Quicken. During the first couple of years after ER I was reviewing monthly to quarterly because of significantly variable expenses (due to cross country move, shift to COBRA then off of COBRA, etc.) Now I am trying to do a semi-annual review with DW of larger spending areas and condition of the portfolio.

 

[scrabbler1]

"Review" has a lot of different meanings to different people. So does "budget."


Because my overall budget has a built-in surplus, or cushion, what I do at the start of the year is to project for my checking account my cash inflows (monthly and quarterly dividends) and cash outflows (expenses) to see where my surpluses exceed $500. That's the general minimum cushion I keep in the account to cover smaller, unforeseen expenses. When the surpluses exceed $500 over many months (lumpy expenses need some surpluses carried forward), I invest them elsewhere. This happens a few times per year.


I monitor this projected checking account register, for lack of a better term, and update it as the actual dividends come in and actual expenses go out. Sometimes, the excess dividends I planned to invest elsewhere disappear. Sometimes, they get bigger.


I don't have set quotas for my expenses. If I need to buy something not planned for, I do so. If my regular surpluses can cover them, that's fine. If the expenses are too big, I can tap into a slush fund I have elsewhere. That very rarely happens.


I have annual totals I keep track of elsewhere, including a spreadsheet which projects annual expenses through age 65, when all of my "reinforcements" will become available. For now, and for the last 9 years, I have been living off my taxable accounts, mainly the dividends they produce. This makes for a low SWR, in the 2%-2.5% range, so I am not worried about running out of money.

 

[GoodWishes]

We look at our spending twice a year, mid year and end of year. DH uses Quicken and runs the spending report.

 

[Scuba]

It’s funny, before ER, I was looking at our spending, budget, investments, etc. regularly and constantly crunching numbers. Now that we’ve ER’d, I only looked at budget for 2017 once - in January 2018, when I tallied up actual spending and compared it to the budget. Luckily it looked fine.

It probably depends on your financial situation; in our case, we have lots of cushion so we can be pretty relaxed about it. It’s been interesting to me how much MORE relaxed I am about it now that we are actually retired.

 

[Dtail]

I track my spending pretty much every single day, and then at the end of each month I look at how much I spent in each category and project what my spending will be by the end of the year.

I probably spend too much time on tracking my spending, but it is fun for me.

+1.
Just retired last year. Wish to see how I stack up, since my budget also included tracking expenses in a MCOL vs. a very HCOL.
Like W2R, it is fun for me too and for me takes about 5-10 minutes a day.

 

[DrRoy]

Last year (1st year of RE) I did a monthly check of our spending by category. We were very close to my pre-RE estimate (except for where I knowingly spent up for travel). This year, I am just watching the monthly total.

 

[marko]

We don't have a budget but our annual spending stays pretty much the same; just spent on different things each year (or the same things with different costs).

Our lifestyle is a sort of regulator.

What I do however is track our spending every month with a projection for the year.

 

[bclover]

I don't budget.

I do track all spending. I also make sure I'm under a 4% withdrawal rate very (too) frequently. Lately that's been about once or twice a week. At the same time I verify that I'm meeting all of my other financial goals (do I have enough cash on hand, do my kids' college funds have enough in them, is my asset allocation where I want, etc.)

I do think your thesis about checking less as time goes on is true for most and will be true for me also.

pretty much me.

 

[racy]

I track & categorize expenses weekly. Not so much to 'budget', but rather to know where it's going. For example, it helped me quickly spot 2 $600 fraudulent credit card charges.

 

[Golden sunsets]

Our "budget" categories are more guidelines, but we do keep track of spending monthly. As some have said, there is a lot of cushion in our budget, so if one category is out of wack, there is usually another category that is "underspent". In other cases, if we overspend in one month I find that we try to revert to the mean in following months. Our total core expenses vary very little from year to year. As W2R said, it is fun for me to track and analyze expenses. Different strokes for different folks.

 

[foxfirev5]

Annual review. Start with January 1 balance add all deposits and subtract end balance. Or simply look at the end balance. It has always been a positive number so we're good.
Kidding aside, retirement is the first time we've actually had a somewhat consistent income level. It is much less complicated than the 30% variations during our work years.

 

[Cobra9777]

Like others, we don't use a budget per se, although I do track our spending in various ways. After 5 years of ER, I have a sort-of intuitive sense of where things are. About 95% of spend runs through 2 cash-back credit cards, which I track at least weekly and pay off monthly. To be "on track," I know the normal range of the CC balances at each month-end. I can also get a sense by the balance in our cash management account, which I review at least weekly, usually more frequently. There's a fairly regular inflow and outflow that's designed to maintain the balance within a certain range if spending is on track.

Once a year in early January, I import bank and CC records into Excel and organize by categories. Then the totals go into a long-term tracking spreadsheet as part of the overall retirement planning analysis. Around this same time, DW and I have a discussion or two about priorities for large discretionary spending for the coming year like travel, home improvements, new car, etc.

 

[45th Birthday]

Once a year I do a plan that breaks spending by category for the coming year into quarterly amounts. Then, at the end of each quarter I review how spending compared to plan.

The point isn't to budget, really, but to see where money is going and track spending versus income. Over the 11 years I have been doing this, it has shown me that we actually should be spending more.

Since I am a financial person by nature, education and experience, this is partly also something I enjoy doing.

 

[mystang52]

I've been budgeting for 40 some odd years, so it's second nature to me now. I don't have a set schedule to review the budget, but I probably review every 3 or 4 months.

 

[The Rodent]

We track ALL expenses in Quicken and have done so for over 25 years.

Start planning our annual budget in December and finalize the first week of January. During the year we make notes on major one-off type expenses or major travel plans that might impact the upcoming budget year. The budgeting also helps to plan our cash flow and IRA distribution needs.

Review monthly (with one of our favorite cocktails). Using Quicken makes this super easy. Also review our portfolio progress at this time. Meet with our financial planner quarterly to keep our portfolio on track. We usually end the year within 1% of our budget goals without any problem.

 

[Bir48die]

I have been retired for over 5 years. Prior to ER, I had developed a detailed budget spreadsheet, including a cumulative variance column. I tracked all expenses by category and subcategory monthly for the first three and a half years. By that point, I had a pretty good idea of my spending patterns, so I discontinued the monthly budgeting exercise. I continue to calculate NW and WR annually and have kept WR in the 3-3.3% range until this year, when I have been blowing that dough.

+1