Couch Potato Budgeting and Expense Tracking

[prototype]

I was wondering if I am the only one here that is something of a couch potato when it comes to yearly budgeting and expense tracking (i.e. no Quicken just a simple spreadsheet).

Here’s what I have been doing on a spreadsheet that I update, usually quarterly since I quit w**k :

1. At the beginning of the year I know what is in my checking/savings accounts (Say $50K just for example).

2. I do keep track of my exact income for the year. These are basically pension, distributions and withdrawals from my investment/brokerage accounts, and perhaps a few other odds and ends which aren’t many (I’ll use $75K as an end of year total income for example).

3. So at the end of the year if I have $45K left in checking/savings I know I spent $80K on everything including taxes for the previous year.

If a one time, significant non-planned expense pops up during the year I do update the appropriate projected line item (usually management reserve with a note).

My spreadsheet starts with projected and ends with actuals for each year. It has the somewhat standard 12 or so line items (rent, utilities, cars, medical, vacations, entertainment, taxes, management reserve, gifts, insurance, management reserve...). If I know I have a significant one time expense coming up (e.g. new car) I will add that in. I start with a 10% management reserve for unexpected items that seem to pop up almost every year.

Some of categories I track in detail, some I don’t. For example rent/utilities, taxes, charities, major vacations and medical) I track exactly. Some I guesstimate to varying degrees like entertainment (movies, eating out, day and overnight trips), hobbies, gifts, car stuff (gas, maintenance items,..), household supplies.

It seems to work for me. Of course my spreadsheet of actual expenses at the end of the year never exactly matches what I actually spent for the year because of my guesstimate categories I assume. But it's always been within a few % (a few $K).

Side note: In the almost 7 years since I FIRE'ed my actual expenses for each year have been all over the place from my "target". Some years $10K under my planned/budgeted, some years $10K over. Some years just about right on.

 

[W2R]

I'm sort of the opposite. I love fiddling with my spending spreadsheet and so I update it daily and pay attention to how my spending is going. Each day I enter anything I bought in cash and account for the amount of cash left in my wallet. Also, each day I choose to manually enter any charges that day to my checking account and credit card.

I do projections of my spending by the end of the year on that spreadsheet. While I am at it, I record my income from SS, mini-pension, interest, and so on. I check and make sure that big items like my property tax, house and car insurance, and estimated income tax payments have cleared the bank (and mark that by those expenses on my spreadsheet).

My spending spreadsheet starts out with a sort of template with all the usual and expected charges each month, by category, and then I add lines as needed. I have already set up my 2018 spreadsheet. My kind of fun.

 

[Trooper]

While I am at it, I record my income from SS, mini-pension, interest, and so on.

Just curious...what's a mini-pension? Is it just a low-dollar pension, or a new type of pension I've never heard of?

 

[Bamaman]

We live a somewhat frugal life, and budgeting is not required. I periodically watch my investments and make adjustments, but that is about it.

It is a semi full time job just opening the mail and moving the massive numbers of papers somewhere. I try to keep business simple so ninth inning is required.

 

[W2R]

Just curious...what's a mini-pension? Is it just a low-dollar pension, or a new type of pension I've never heard of?

It's what I call my tiny pension. I am grateful to get it, but it is quite small and not one of these "full boat" pensions like so many people used to get back in the old days. Of course some still do, but not as many as was once the case. I rely mostly upon my investments for income now that I am retired, and my pension takes care of less than 15% of that income.

I also call it my "itsy bitsy teeny weeny yellow polka-dot" pension, thinking of this song:

 

[Trooper]

I do keep track of my exact income for the year. These are basically pension, distributions and withdrawals from my investment/brokerage accounts, and perhaps a few other odds and ends which aren’t many (I’ll use $75K as an end of year total income for example).

So at the end of the year if I have $45K left in checking/savings I know I spent $80K on everything including taxes for the previous year.

I like the simplicity of that, but we have a couple of items for which your method wouldn't work. For example, we "accrue" for certain future large purchases like new cars, new AC unit on the home, etc. Each year we fund those based on life expectancy of current vehicles, and future cost of new ones.
As such we count that funding as an "expense" in the current year, even though no cash outlay.

 

[Helena]

.

I keep track of my exact spending daily and my liquid assets/investments monthly.

 

[FIREd]

After years of tracking our expenses to the cent with Quicken, I now only track our portfolio withdrawals (our portfolio is our only source of income). I determine how much I will pull out of our portfolio in the upcoming year and set up appropriate monthly withdrawals. Some of the money we withdraw is spent right away, and some of it is saved for future expenses (like a big trip or a new roof). But as long as I don't have to double dip in our portfolio, which would be a huge red flag, I know that our spending is on track and that's really all I care about.

 

[audreyh1]

We have a very rough “kitchen sink” budget.

But we do track expenses quite carefully facilitated by Quicken. I run some reports every month or two to see how we are doing. We usually come in under budget, so by the end of the year I know what we didn’t spend.

We don’t budget accrue for large purchases because we have substantial funds already set aside in short-term investments and unspent funds get added to that.

 

[kaudrey]

I like playing with my spreadsheet, but I also only keep track of some bigger expense items: Travel/Vacation, Vehicle, Real Estate, Capital Expenditures, Pets, and Work costs (commuting, clothes, dry cleaning), Health Care, and Taxes. Everything else falls under "Living Expenses", which is the difference between my income and all of these categories.


I'm still working. I suppose I should separate out restaurants and entertainment, because that is a significant dollar amount, but that's about where my "couch potato" level of effort kicks in....

 

[mamadogmamacat]

In the nearly two years of ER I find myself doing nothing more than tracking the total spending amount for each year. So far it is very close to predicted. And predicted itself has a cushion relative to tools like FIRECALC, i-orp, my own SS from when i was working, etc.

This is not what I expected. really thought i would be tracking and categorizing to a fine degree just as I did while working and planning for ER. Seems as though all my time spent with analysis and tracking tools for both job and financial planning went out the window once the simple joy and relaxation of ER became a reality for me. it's great.

 

[jimnjana]

I don't use quicken, nor a spreadsheet, no budget, and don't balance the checkbook. Pretty much a couch potato. But I do know my numbers. I check my cc statements and bills most of which are on autopay. Move money into and out of primary checking to/from high yield savings or other credit union accounts as needed (rebalancing our spending money accounts)

 

[Red Badger]

I don't use quicken, nor a spreadsheet, no budget, and don't balance the checkbook. Pretty much a couch potato. But I do know my numbers. I check my cc statements and bills most of which are on autopay. Move money into and out of primary checking to/from high yield savings or other credit union accounts as needed (rebalancing our spending money accounts)

+1.
Just make sure the inflows >/= outflows.

Also, checks? My remaining few have Wachovia listed as the bank. I may write 1 or 2 a year...

 

[Marita40]

I'm still working and single. One year I tried a careful, detailed spreadsheet type budget for each category of spending. It drove me crazy. I've decided I do much better just living within my means on a month to month basis. That is, with my biweekly paycheck, I pay myself first into my savings/retirement accounts (automatic deductions, so I never think about it), pay my regular bills, then live off whatever remains throughout the month. It is a balancing act: if I buy something fun, I cut back a bit on restaurants. Etc. Works for me.

 

[audreyh1]

Over two decades ago, I set up categories in Quicken. As transactions are imported, most categories are autofilled as Quicken learns the payees. Occasionally I have to assign a category, but it’s rare.

So now after importing transactions, I know exactly where my spending went. I just select the report and view the spending by category. Very easy, and very easy to compare to my budget.

 

[Sunset]

When I worked, I didn't track any spending, just the total $$$ I had at the end of the year.

After retirement, I didn't change for the first 2 years, then I because bugged because some folks here could say they spent $x on y per year.

So I got an app for that, on my phone and track exactly what I spend each day as I spend it.
Once a month, I transfer the monthly total category amounts (about 20 numbers) to a spreadsheet on my computer, so I can have pretty charts and compare over years (in the future).

I still do the total asset value at the end of the year (this is going to be a great year).

It's all easy and convenient.

 

[ABQ2015]

This is my fifth year of tracking pre-retirement expenses and I record all my expenses in about 15 categories on a spreadsheet. While this exercise has given me confidence that my retirement income will cover my spending, sometimes I wonder if all the tracking is that necessary or if it just makes me feel good that I am somehow “planning for retirement.” Several of the categories (e.g., groceries, utilities, gifts) are consistent from year to year but total expenses can vary as much as $10K. The increase is almost always due to home repairs.

I could probably switch to couch potato expense tracking and focus on tracking the more important categories but I actually enjoy writing down my expenditures. Also I want to continue the detailed approach for at least the first few years of retirement because I plan to move to a higher cost of living area and to rent at first. So I am interested in determining how much more I will spend and the cost of renting vs owning a home. And I want to know how much my health expenses increase over the years and want to closely monitor my travel costs at first since this will be a significant portion of my retirement budget.

 

[shortstop14]

Guess I'm a real couch potato. We've never really had a budget, we just tend to not spend much. So in retirement, I just track total spend per month. The only expense categories I track are unusual large one-time expenses, and travel expenses. So it's easy to determine the average run-rate of normal living expenses in the aggregate. As long as total expenses are within my safe withdrawal range, I'm happy.

If the time for cutbacks occurs, travel would be reduced. I hope things never need to get more granular than that. If they do, I supposed we'd do a detailed budget for a couple of months, and decide on cuts from that.

 

[DrRoy]

I have always tracked investments monthly and continue to do so. Before RE this year, I never tracked spending closely. Our discipline always had us spending less than our income and we saved 15-25%, so I did not see the need. This year, I have tracked spending monthly in about 10 categories, mostly out of curiosity. I am not sure if I will continue with the categories next year - maybe just the monthly total.

 

[truenorth418]

I keep a monthly budget so I update that at the end of every month with actuals. But December is a big month for me to finalize next year’s budget, maybe the year after.

 

[Floridatennisplayer]

Wow, life is too short for me to be writing down everything or anything I spend. Seems like a bunch of useless busywork. Knowing exactly what I spend daily or monthly would not change anything I do.

 

[Dawg52]

Wow, life is too short for me to be writing down everything or anything I spend. Seems like a bunch of useless busywork. Knowing exactly what I spend daily or monthly would not change anything I do.

Same here. Every couple of years if I'm bored I might sketch out a basic budget for the year and compare it to my annual income just for grins. But I don't track my expenses during the year to see how it compares to my projections.

 

[easysurfer]

I keep a budget with a budgeting software I bought a long time ago. Doesn't keep as much detail and not tied to my checking account like Quicken, but for me, easier to use than trying to budget with a spreadsheet.

The company that sells the software apparently is no more. Good thing the program is a buy once, keep forever type .

 

[38Chevy454]

I'm like the replies that say just track the total expenses and keep that in check. I do have a spreadsheet I use to track house utility and other expenses that I need for my small side business home office tax deduction. So I guess that I do more budget tracking than just totals, but beyond the house expenses I do not break it down further. I use my Costco Visa for almost all purchases, so that is a pretty good indicator of expenses month to month or year to year.

 

[jollystomper]

Wow, life is too short for me to be writing down everything or anything I spend. Seems like a bunch of useless busywork. Knowing exactly what I spend daily or monthly would not change anything I do.

It depends on what financial stage you are in. We found this very helpful when our family was young and growing, and finances were getting away from us (e.g. noticing that we had less in the bank at the end of the year). Doing this for a 30-90 day period just to see where it was going was a helpful start. It also started reinforcing spending discipline for us.

Budgeting was very helpful when we had a house full of kids to ensure things stayed on track. If one is just spending on oneself, then you probably do not need a budget. But with kids at different ages and different needs, along with trying to save for things like college, house, retirement, etc. it became important to plan how to spend things, so that we could still save (and as the savings grew, invest).

Now that the kids are adults and on their own, we have many fewer expenses to track, so we budget more by cash flow than by specific categories. We know what our fixed expenses will be and when they hit, so we can predict what the expected cash flow will be for a given month and plan accordingly.