Poll: How do you budget?

[DrRoy]

When I was working and accumulating, I did what you did. I didn't spend what was left, but I made sure to pay myself first. Maxed out 401K's, took out 15 year mortgage and paid it off sooner, paid off any debt quickly and then saved and spent the rest without any formal budget. I was making good money and I knew we were living far below our means so I didn't really worry about a budget.

Now, as a retired person we set up a budget at the beginning of the year and we are paying attention to whether or not we're hitting our numbers.

+1. We are actually expanding our spending these first few years of RE to remodel the house and travel more.

 

[donheff]

Never budgeted. When working we kept adjusting our savings up and lived off the remainder. In planning for ER we evaluated spending and didn't pull the plug until we felt confident we could continue to live the same as when working within our pensions/SS/SWR. During 15 years of ER we continued to do what we always did and have stayed well within expectations. If there is some sort of massive downturn coupled with inflation, or if tax rates are increased astronomically, requiring us to scale back I would consider budgeting to figure out what we can safely do.

 

[mystang52]

Given the choices I selected "strict budget" but that's not 100% accurate. I have been a diligent budgeter for years, and habits die hard. I like to plan for known expenses (and that includes fun things). However, just because I have a budget does not mean we won't spend outside that be it for a fun or needed item.

 

[Markola]

YNAB

 

[foxfirev5]

No budget as long as the cash coming in is greater than the outlay. Like most here, decades of LBYM ensure success.

 

[GenXguy]

I'll say loosely, but my spending doesn't follow my budget, my budget follows my spending, and I only include necessary expenses in my budget. It doesn't include discretionary or savings, but rather shows what is left over for discretionary and savings.

In other words, I'm already a frugal spender, and my budget is a minimum required spending on average to pay the necessary bills (including sinking funds for long term expenses), and whatever is left, can be saved or spent on discretionary. I saved over 80% last year with minimal discretionary, so I'm not the type of person that needs a budget to keep my spending in check.

My budget for required expenses in the last year has been running around $1250/mo, and that's including sinking funds but excludes any charity/insurance which is taken out of my paycheck before I receive it, or that figure jumps up to about $1300/mo.

 

[ShokWaveRider]

The closest we get to budgeting is tracking "Roughly" what we spend on whatever in Quicken, then doing absolutely nothing with the data. Not sure what this is called other than habit.

 

[brett]

Don't have a budget. We have a target annual spend but this is only for determining how much cash to bring down. If we spend more, we bring more cash down.

We only care about the totals. We do keep track of what we spend on food, clothing etc. No spreadsheet. Just a tape on on checking account once a month. Our monthly spend can vary considerably because we sometimes pay larger travel expenses in advance.

We track our investments in a very different fashion!

 

[Midpack]

We use Excel to budget and track spending in detail, have for decades. We update monthly, but usually only review in detail annually. Monthly review takes a minute or less.

Like others we’re naturally frugal and our spending habits are ingrained. The spreadsheet is just a check to see if we’ve gone off track, and adjust, but it’s rare.

 

[HadEnuff]

I answered "loosely defined"...When I was working and saving for retirement I guess I'd be accurately described as "pay myself first", because I funded my retirement vehicles first, and my lifestyle after that.
Over many years I tracked what I spent, and had a pretty good handle on it when I retired. So I have a good idea that unless I start to go overboard on some discretionary spending, I'll be OK...at the end of the year I review my spending, and I look at what I have left to get me to the end of the highway.

So far so good, but it's pretty loose at this point.

 

[euro]

Budgets?

We don't need no stinkin' budgets -

This +1

 

[Nemo2]

We know how much we can afford to spend, and we spend less than that.

 

[W2R]

I don't have a budget, but I keep a very close eye on every penny that I spend. On the last day of the month I add it all up and compare the monthly total (and year-so-far total) with previous months and years. If I am not happy with what I am seeing, then I delay discretionary purchases until things smooth out.

Works for me, but then I have few desires so I am not spending anywhere near what FIRECalc says I could.

 

[Gumby]

I have a spreadsheet of my own devising. At the beginning of every year, I insert my estimate as to the annual spend for every category, which is based largely on the prior year plus or minus anything I know will change. Then I track every penny as it is spent. My estimates are usually accurate to within a few percent.

That said, we don't actually "budget". We spend whatever we want on whatever we want. I just happen to know fairly closely what that likely will end up being. If we go over, I don't really care, since it is always less than we have available to spend.

 

[braumeister]

I have a spreadsheet of my own devising. At the beginning of every year, I insert my estimate as to the annual spend for every category, which is based largely on the prior year plus or minus anything I know will change. Then I track every penny as it is spent. My estimates are usually accurate to within a few percent.

That said, we don't actually "budget". We spend whatever we want on whatever we want. I just happen to know fairly closely what that likely will end up being. If we go over, I don't really care, since it is always less than we have available to spend.

This is what I do.
It's kind of fun seeing how close my estimates for each spending category are to the actual expenditures, but I'm happy to adjust them during the year as needed.

 

[pacergal]

When working, always paid myself first--meaning contributions to savings was automatically out before the rest went into checking for living expenses.
I kept track of what we spent in general categories and mentally knew how much was available each month. We always had enough to get to the end of the month, and frequently a little extra.
Now, we know what our monthly "spend" is, and thats what goes to the checking account.

I also track expenditures monthly.

 

[4legsgood]

I selected 'loosely'. On any purchase over $1000 I question myself. I periodically think about monthly expenditures and see if I can reduce. Luxury items are not my style.

 

[dtbach]

We don't really have a budget but do have "pots" of money that is funded for things like travel, home repair, etc. Still watch the grocery ads for deals even though it wouldn't really matter to the bottom line much.


So I had to put "no budget"

 

[Winemaker]

DW would ask,"What's a budget?"

 

[rk911]

YNAB

??

 

[HillCountry]

I have a budget work sheet in my xls. But the current year budget is nothing but tracking the max of previous years spending by the categories.

I do generate retirement budget (2023) based on current one.

So let’s call it long term budget.

 

[Rustic23]

All our income goes into one checking account. I balance it monthly and record the total debits/credits. The spreadsheet calculates my average spending, and the estimated spending for the year. It then adds it up with IRA's, taxable spending, and checking. With that number I forecast total spending and saving for the next 25 years. I use a 4% inflation rate and for COLA pensions I use .04% less than inflation. I don't think chain inflation as used by SS accounts for total inflation. These numbers are arbitrary, and I would welcome any comments. Oh, and the spreadsheet allows me to enter bulk spending i.e. replace a car, roof, travel, etc. in any given year.

I look at the forecast, pay particular attention of the next 5 years, a little less at 10 years, and see what the kids are going to get 15-25 years. Bottom line, as long as it looks good we don't change our lifestyle or spending habits. Heck, it took up 75 years to perfect it, why change as long as the money last.

 

[ls99]

What is this this budget thing anyway? I always spent little, seems since retirement each year I have more $. Time to start blowing dough.

 

[W2R]

YNAB

??

https://www.youneedabudget.com/

You can try it out for free, IIRC.

 

[Montecfo]

I budgeted closely when cash flow was tighter (income lower) such as first few work.years. We had some built-in frugality (never running credit card debt or borrowing for cars) which requires saving for replacement vehicles and major purchases.

Then once we had saved a good bit we found just continuing those good habits and LBYM eliminated the need for detailed budgeting. In some ways the "budgeting" was just structuring our lives so we could max out retirement plans, pay cash for major purchases, etc.

So now FIRED, I track expenses but do not do a firm budget. Don't need to.