Couch Potato Budgeting and Expense Tracking

[kcowan]

We ran a detailed budget for the first 2 years of retirement. Then I decided that it was not worth it. We do however pay attention to expense like we did with the detailed budget. It creates some challenges to cover certain extraordinary expenses but I decided that that was much less effort than the regular balancing.

I do not question people who do it. I found it very satisfying when I did it. I just decided to give up some control. After 13 more years, we have enough spare room to manage just fine. And it is kind of freeing.

 

[PatrickA5]

One side benefit of having everything on record is that if I need to find out how long ago I paid to have my home painted or my car repaired, I can pull up the expense category, scroll down the list and find it.

I can't tell you how many times over the years this has become handy. My dryer just went out. DW wants to know when we bought it. Couple of clicks later and I have the answer along with how much we paid. Unfortunately, the answer gave her more ammunition to buy a new dryer.

 

[REWahoo]

I can't tell you how many times over the years this has become handy. My dryer just went out. DW wants to know when we bought it. Couple of clicks later and I have the answer along with how much we paid.

+1

Having a record of when we purchased something and how much we paid is a handy side benefit to tracking expenses. It definitely helps with the repair or replace decision on a major appliance as I tend to think something is newer than it actually is.

 

[ERD50]

Originally Posted by ERD50 View Post
I care. Why? Because I try to understand other people. Sometimes I miss something, and I learn when other people explain what they get from something (not just that they do it).

OK. But you didn't just say you didn't understand. You said

I think people are kidding themselves to say there is value to it ... just don't try to 'sell' me on it having value, unless you can back it up

That's seems insulting and confrontational, which often leads to less than productive discussions.

OK, point taken. For the most part, I agree - most people here aren't trying to "Sell" others on a detailed budget, in hindsight I used the term far too loosely. Not sure about this thread, but I'm sure there have been others where people said this detailed tracking was important, and either said or implied that it would be valuable to others and that others should be doing it.

It would have been better if I had said "they seem to be selling themselves on the idea that this has value". And again, I do see some value in doing this pre-retirement to get a better handle on which expenses will continue into post retirement. I did that with a rough estimate of the bigger items, and that seemed sufficient for me - whether taking it down to a more detailed level is worth the effort is questionable though. I suppose it depends on specific circumstances.

And I did say "I think", not stating it in absolute terms.

-ERD50

 

[Floridatennisplayer]

Still don’t get it. All that work for what? I am not trying to put anyone down that does. I am just for me completely failing to see what effect it could possibly have.

Putting numbers in little boxes every week or month. Saving grocery receipts. If I need to see how much I spent on my dryer and when I bought it....I just look at the receipt. I don’t need a time consuming elaborate spread sheet. Tracking groceries, fuel? You are still going to buy them...right? If my car need gas...I put gas in it!

You know what your major expenses are as they are pretty much fixed: mortgage/rent, car payment, utilities, insurances, property taxes, gasoline, groceries. What good does it do me to write them down each month? Sure, they may vary a few dollars each month but that’s a given and doesn’t change anything.

Call me perplexed..

 

[REWahoo]

Perplexed, some people track expenses for the same reason some people use a FA. That's the way they prefer to manage their expenses/investments. Nothing wrong with either approach is there?

 

[Scuba]

+1



Having a record of when we purchased something and how much we paid is a handy side benefit to tracking expenses. It definitely helps with the repair or replace decision on a major appliance as I tend to think something is newer than it actually is.

+1
My Stahlsac SCUBA bag recently developed a problem with one of the zippers. They have a lifetime warranty but I couldn’t remember where we bought them. Thought it was 2 years old but searched credit card spend summary and found out not only where they were bought, but also that they were over 4 years old. Went back to the store of purchase and walked out with a new bag, no charge. Easy peasy.

 

[Doc0]

I use MINT (mint.com)

I sweep my bank account and credit card data into the database and have a precise daily accounting of expenditure and available assets, and can track it on my cell or desktop. I charge everything I can on a FIDO card and pay it off monthly getting 2% back. I download the data into a spreadsheet and strip out credits and adjustments to get an accurate monthly expenditure. It's virtually automatic and it learns categories as you go. I recently had a medicare issue and could query the Mint database and in nanoseconds had the data I needed. So I recommend that.

 

[mountainsoft]

My "budget" consists of a paper chart I keep in a binder each month. The left side is divided into four sections (1st, 8th, 15th, and 23rd). The right side is our annual and semi-annual expenses like taxes, insurance, licenses, etc.

The chart lets me see at a glance which bills I have paid, and which expenses we still need to allow for in that pay period. Our income varies, as does our expenses (especially groceries). So if a check is lower this pay period and we spent more on groceries, I can quickly figure out how much extra we have left over to put in savings or "play" with.

My chart also helps me plan for those annual expenses that are not a monthly routine.

At the end of each month, I scan the chart to file it away, and print out a new chart for the next month. I have been using this system for at least 30 years and find it works very well. It only takes a couple minutes to update with each paycheck or shopping trip, and the benefits far outweigh any inconvenience for me.

I also try to scan any receipts to items that I may need to return, replace, or need to reference in the future (electronics, appliances, car parts, etc.). Obviously I don't scan grocery, gas, clothing, or similar receipts. These days I buy most things online, so I can simply save the email or electronic invoice for future reference.

I also save most account statements in PDF electronic form. I almost never need to refer back to them, but they have come in handy when I've lost the receipt to something or when I've had to track down fraudulent charges.

 

[karen1972]

I still don’t get the point of writing down each and every month your expenses. Unless, you are in such financial dire straits that you have to watch every single penny because you might not have enough money to cover it.

I know close enough what my expenses will be....real estate taxes, homeowners insurance, auto insurance, cable/internet. I know roughly how much we spend on groceries, gasoline, and utilities. Sure, things come up unexpectedly.....but, so what. Do you look at these spreadsheets and say...”honey, looks like you got an extra tank of gasoline this month...better quit driving so much....or the grocery costs were $13.43 more this month than last month, let’s skip a few meals next month to even that out.

Do you do it for fun? I just don’t see the point.

Maybe that's the difference, there is no way the grocery cost swings by only $13.43... mine varied by $300, sometimes $500 a month.

It is about setting boundaries for me. We can go out and have fun, but within reason. Its also about prioritizing. I would like to take more vacations, so where can I re-allocate from. Once I saw our Auto expenses, especially repair it was a no-brainer to sell my Audi and buy a Honda... done, then I went to Europe.

I use Quicken to balance my checkbook, just make sure stuff gets cashed, make sure we don't get random charges (which happens more than I'd like especially since my honey likes to sign up for subscriptions that auto-renew even when you have the email that said you canceled), etc. The budget is just a look at allocation to make sure I'm actually spending in the areas of priority vs. blowing it on stupid stuff. I also like to see the trend as sometimes things creep up, ie like insurance which over time you see it skyrocketing reminds you to go shop around, cable, etc.

 

[Nature Lover]

I track income and expenditures monthly, and prepare a spending plan for the year ---The spending plan is primarily for use as a guide, and tracking expenditures allows me to see how I'm doing.

 

[RobbieB]

Perplexed, some people track expenses for the same reason some people use a FA. That's the way they prefer to manage their expenses/investments. Nothing wrong with either approach is there?

Yeah Baby!

I've never tracked expenses and never had a budget. I've never balanced a checkbook. I do use a 1% AUM FA.

Yup, nothing wrong with either. You do what you do and I'll do what I do and...