Post RE Monthly Budget Categories

[Scuba]

I think most of these have been mentioned already, but we spend on wine/liquor, entertainment such as hosting parties and/or going out to live performances, gifts that aren’t just holidays/birthdays, personal care (haircuts, cosmetics, pedicures), gym membership, sports equipment (SCUBA, bikes, SUP/kayak accessories), housekeeper, household cleaning products. However your best bet is to look at your own historical spending. If your categories capture your spending, you’re good.

 

[W2R]

Here are my categories, and averages for the past five years of retirement (ages 64-69). Income tax amounts are not included because I don't want to and they wouldn't help you anyway.

Category|Averages for 2012-2017|Comments
Groceries|$2,716|Includes toiletries, detergent, etc.
Restaurants|$3,154|lunch every day plus some dinners
Gasoline|$706|Everything is close by.
Car|$1,728|insurance, maintenance, registration
House|$7,726|insurance (homeowners', wind-and-hail, and flood), prop. tax, mowing, maint.+upgrades
Utilities|$3,856|internet, nat. gas, electricity, water, trash, sewage, cell
Fitness|$1,000|gym, exercise, and weight loss expenses
Clothes|$359|casual retiree clothes and shoes
Miscellaneous|$3,172|Gifts, haircuts, computers, etc
Video Games, apps|$477|my hobby
Medical|$8,645|dental work, implants, surgery, deductible, co-pay, insurance, Medicare, prescriptions, OTC medications, etc
Income Taxes|

 

[karen1972]

Here is my list
Food & Dining (Groceries, Restaurants, Alcohol)
Dwelling (HOA, Improvement, Services, Supplies, Mortgage, Property Tax, Insurance)
Health (Dentist, Doctor, Eyecare, Gym, Vitamins, HSA, Pharmacy, Insurance)
Auto (Gas, Insurance, Service, Parking/Tolls, DMV, public transit)
Utilities (Cable, Gas, Electric, Cellphone, Water&Waste)
Travel (Transport, Lodging, Entertainment)
Shopping (Clothing, Electronics, Software, Household Items, Furniture, Sports)
Entertainment
Umbrella Ins
Gifts (Charity, Family)
Legal (attorney, cpa)
Personal Care (Hair, Nails, Massage, etc)
Pet (Vet, Food, Toys)

 

[Ed B]

I'm retired! I don't have time to do all that detailed breakout stuff. [emoji23] If I buy something at the grocery store, it goes under Groceries. To make my life easier, I have a Cash category that is supposed to include eating out, liquor, small purchases, and other totally discretionary expenses that I shouldn't need to track closely. But then I decided I needed to understand those discretionary expenses better, so now I have sub-categories under Cash for Dining, Liquor, Skiing, and a couple of others.

I've only been doing this tracking stuff for around 30 or 40 years. I'll figure it out some day!

BTW, you have a fine set of categories. Enjoy retirement. Don't get too hung up on the financial details.

Thanks for the response and the encouragement.

For me the detailed breakout is an exercise to help me determine, as close as possible, how we will use our revenue stream once I retire. Really, I just want to make sure I am not missing a significant money sink. Dental insurance and dental expense is one I missed but shouldn't have.

Thanks for the continued responses. And perhaps this discussion is helpful to some of our new members. I know similar discussions on these forums have really heelped me.

 

[Carpediem]

I think accrual for auto replacement was being suggested too. If you plan on buying a new car every 10 years, at $20K over trade in, for example, you might want to budget $2000 each year.

Regarding annual accruals for future expenses, do you withdraw the annual accrual amount each year even if the accrual period might be several years in the future? If so, where/what type of account do you store the withdrawn amount?

 

[exnavynuke]

Here's what I use:
http://www.gceenterprises.com/jlcnuke/blank_budget.xls

 

[RunningBum]

Regarding annual accruals for future expenses, do you withdraw the annual accrual amount each year even if the accrual period might be several years in the future? If so, where/what type of account do you store the withdrawn amount?

I don't. I think some do, so they can answer with what they do.

For me it's mental accounting. I made a pretty good budget as I was approaching ER, and included such capital replacements. But the extent of my budget tracking is to track the outflows from my checking account (including CC payments) every month and having a yearly and running 12 month total. I do make notes in my spreadsheet of exceptional expenses such as a car purchase.

The OP seemed to want to track more closely, and this is a big item that appeared to be missing, though it could be handled separately.

 

[Independent]

If I'm looking for a comprehensive list of potential expenses, I'd use one of the Consumer Expenditure Survey tables. They have the bonus of showing average expenses for other people. (I wouldn't go into their incredible detail on food)

Here's one for couples over age 65 https://www.bls.gov/cex/2016/CrossTabs/sizbyage/atwo.PDF

 

[jazz4cash]

Regarding annual accruals for future expenses, do you withdraw the annual accrual amount each year even if the accrual period might be several years in the future? If so, where/what type of account do you store the withdrawn amount?

I started off by pulling the monthly requirement from the portfolio and sending accrual amounts to a dedicated online savings account monthly. It was too many transactions so I decided to simplify by leaving the annual amounts invested in the portfolio and taking them as needed. Every year I pay the insurance, property taxes and a few others in a lump sum. Having a CD ladder as a buffer supports this.

 

[jebmke]

for a couple of years I tracked expenses in 20 categories to compare to my pre-RE budget. The top 10 represented 70% of our spend. I have since backed off to three broad categies

Income taxes
Capital (large items that have long useful life -- e.g. car)
Everything else

 

[RunningBum]

for a couple of years I tracked expenses in 20 categories to compare to my pre-RE budget. The top 10 represented 70% of our spend. I have since backed off to three broad categies

Income taxes
Capital (large items that have long useful life -- e.g. car)
Everything else

Yeah, that's actually what I do. Most income taxes don't even count against my budget because I've already discounted the capital gains taxes and IRA distribution taxes in my investment net worth. That way my budget isn't thrown off in a year like 2017 when I decided to take a large CG and take the tax hit. I do include taxes I pay on investment interest, dividends, and MF CG distributions.

 

[aaronc879]

Here are my categories, and averages for the past five years of retirement (ages 64-69). Income tax amounts are not included because I don't want to and they wouldn't help you anyway.

Category|Averages for 2012-2017|Comments
Groceries|$2,716|Includes toiletries, detergent, etc.
Restaurants|$3,154|lunch every day plus some dinners
Gasoline|$706|Everything is close by.
Car|$1,728|insurance, maintenance, registration
House|$7,726|insurance (homeowners', wind-and-hail, and flood), prop. tax, mowing, maint.+upgrades
Utilities|$3,856|internet, nat. gas, electricity, water, trash, sewage, cell
Fitness|$1,000|gym, exercise, and weight loss expenses
Clothes|$359|casual retiree clothes and shoes
Miscellaneous|$3,172|Gifts, haircuts, computers, etc
Video Games, apps|$477|my hobby
Medical|$8,645|dental work, implants, surgery, deductible, co-pay, insurance, Medicare, prescriptions, OTC medications, etc
Income Taxes|

"Groceries including detergent". Tide pods are not food W2R

 

[W2R]

"Groceries including detergent". Tide pods are not food W2R

OK, I'll try to remember that.

What I meant is that "groceries" includes all that other non-food stuff that people buy when they shop for groceries.

 

[Mdlerth]

Mdlerth likes this comment

"Groceries including detergent". Tide pods are not food W2R

The reply buttons need to include a "like" option.

 

[TimevsMoney]

Hum, from personal experience with my lovely DW I would include Amazon Prime. Our front door step always has an obstacle to clear. Does Property Insurance include Flood Insurance? I recommend it. Under transportation I do not see "car maintenance." Even if new, oil changes and such could eat up a couple of hundred bucks annually. If the car is 5 years or older, I would show 1,000. Very comprehensive, good luck.

 

[woodguy00]

Ed,

I see the hobbies categories has field trial expenses. What sort do you run? I ran a few retriever hunt tests with a lab and later spaniel tests with a springer. Just had to put my old girl (springer) down last month. Sad day. I've never have been a good enough trainer for field trials though.

 

[Jerry1]

The reply buttons need to include a "like" option.

I agree. I guess we're all conditioned by Facebook, but it would be nice to signal agreement with something without reposting. I'm on another forum that has it. It would be nice to see here.

 

[Ed B]

Ed,

I see the hobbies categories has field trial expenses. What sort do you run? I ran a few retriever hunt tests with a lab and later spaniel tests with a springer. Just had to put my old girl (springer) down last month. Sad day. I've never have been a good enough trainer for field trials though.

Beagle Field trials for me. I do pretty well and have one with 4 wins just needing points, another with one win and lots of points and a couple of young up and comers. I live on the western-most fringe of AKC Gundog beagle field trials so I may not finish these girls just because of logistics and the cost of using a professional handler. I prefer to handle them myself anyway. I enjoy the hound work more than the championship anyway.

 

[Floridatennisplayer]

Seems like a full time job Categorizing and tracking all this! Not sure of the point of all this busy work. Doesn’t changeanything. I would still need to put gas in my car, id still need to buy groceries, pay my property taxes etc

 

[sengsational]

Hope this helps.

You are GOOD! I'm going to frame this and say to DW "SEE..EEE! I'm not the only one"

 

[Tailgate]

You are GOOD! I'm going to frame this and say to DW "SEE..EEE! I'm not the only one"

+1 ... thought the same thing

 

[karen1972]

I have to say I'm always amazed when people budget for things like netflix but then don't budget for things like replacing everyday items from electronics (like computer/ipad/phones) to furniture (that mattress is not good for 50 years) to appliances to basics like dishes and towels. I assume most people have that in just a big old "other" category.

After having gone through the HOA budgets, I like the two budget system.. you have your operating budget for day to day known expenses and you have your "reserve" budget for those things you expect a "useful" life for. Then you can put together a forecast for your car will be replaced every 10 years, your mattress every 10 years, your water heater every 15 years, etc...

 

[Ed B]

I have to say I'm always amazed when people budget for things like netflix but then don't budget for things like replacing everyday items from electronics (like computer/ipad/phones) to furniture (that mattress is not good for 50 years) to appliances to basics like dishes and towels. I assume most people have that in just a big old "other" category.

After having gone through the HOA budgets, I like the two budget system.. you have your operating budget for day to day known expenses and you have your "reserve" budget for those things you expect a "useful" life for. Then you can put together a forecast for your car will be replaced every 10 years, your mattress every 10 years, your water heater every 15 years, etc...

Things like Netflix are discretionary and can be dropped for any reason. It helps me know how much I can trim when we hit a stubborn bear market. I-Pads and computers are not urgent needs in our household. We have some redundancy there. If one goes out we can wait months before repkacing it and we are not above accepting hand-me-downs for those type of things. They aren't that important to us.

Operating budget items are included in the non-discretionary column. I may be able to find cost savings there in a given year but an expense for tjose items will always be there. In my case things like a car replacement is accounted for in my planning but I didn't include that as an accrual line item in my budget. But to keep DW informed I probably should, otherwise the grandkids will have far too many gifts under the tree at Christmas.

 

[Sunset]

Seems like a full time job Categorizing and tracking all this! Not sure of the point of all this busy work. Doesn’t change anything. I would still need to put gas in my car, id still need to buy groceries, pay my property taxes etc

I was like that, no really counting until I realized I didn't know exactly how much was spent. I found out I spend about 1/2 of what I was telling everyone on booze

This is what I track, I use my phone so it's easy to do.

The last 5 are split out, as I wanted to know exactly what these numbers were even if they could fit in another category.

Groceries
Eating in Restaurant
Take Out Food
Fuel
General House
Travel
Gifts
Technology
Entertainment
Clothes
Medical & Dental
Automotive
Fed Taxes
IL Income Taxes
Insurance Auto House Umbrella


Tools
Booze
Guns
Lottery
Credit Card Bonus Value

 

[mountainsoft]

Here are my budget estimates based on our current and predicted spending:

1790 Electric (149/mo)
240 Garbage (40 every other month)
9600 Grocery (800/mo)
960 HER Gas (80/mo)
960 HIS Gas (80/mo)
880 Home Insurance
5100 Property Taxes – May qualify for senior deductions after age 62
380 HER car insurance (190 every 6 months - After lowering mileage driven)
65 HER car license
25 Trailer license
380 HIS car insurance (190 every 6 months)
65 HIS car license
55 Safe Deposit Box
300 Home Phone (25/mo)
360 Cell Phones (30/mo)
900 Internet (75/mo)
360 Netflix (30/mo)
4300 Federal Income Tax based on 50K income
5880 Medical (490/mo based on WA health exchange estimate)
2080 Dinners Out (26 outings at $80 each - once every two weeks)
3000 Emergency Fund (home repairs, car repairs, clothing, etc.)
3000 Recreation (movies, hiking, vacations, etc.)