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Old 07-29-2017, 11:52 PM   #61
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Quote:
Originally Posted by Shabby View Post
I am constantly revising my retirement budget as I am super close to pulling the trigger. I am wondering how you account for things like:

Toy/Fun Purchases
Gifts
Clothes
ATM/Other

Also, I assume I should have these:
Healthcare
Car Depreciation
Trips

Thanks,

For toy/fun purchases.
DH and I assign to each of us $X amount of spending money each year (this varies somewhat each year due to overall budget). Also, the cash back we get back from Amex goes to this category. We each do those kinds of purchases from our respective spending money. This is great since it reduces any possibility of someone thinking the other is spending too much money on X. If DH wants to buy a $200 piece of software that I have no interest in -- fine. It comes out of his spending money. If I spend $50 on the new expansion of Hearthstone, that is fine with him since it comes out of my spending money. Typically the things that come out of spending money are the fun things and our personal computers/electronics.

Occasionally there is something like this that we will equally use and we split it between us.

Gifts - Yes, of course those are budgeted.

Clothes
- Budgeted. As are other personal care items.

ATM/Other - ATM isn't a category. The form something is spent in doesn't matter. That is if I spend it in cash or by check or by credit card is irrelevant to the category. We do have a cash miscellaneous category where we end up budgeting any unaccounted for cash (we count cash at beginning and end of each month). Our unaccounted for cash spending is usually less than $5 per month.

Everything is budgeted and accounted for (I use YNAB).

Healthcare - Yes, of course. We have separate categories for premiums versus healthcare spending itself.

Trips - Yes, of course.

Car Depreciation - No. I don't budget during the year for anything that will not be spent during that year. I do pro forma budgets for several years out, however, and I do budget for those kinds of items in my pro forma budget for the year I expect to buy the item. I am aware of these things and when they are likely to come out. That said, it is certainly a valid choice to budget something monthly for the car purchase that will occur in a future year.
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Old 07-30-2017, 12:22 AM   #62
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We are Quicken users from way back. For the last 17 years we also have a simplified pre-RE spreadsheet. It leaves out expenses that I will not be paying in RE like SS taxes and college education (covered by 529 plans). It is not perfect. For example I know that taxes will drop in RE but medical will go up about the same amount. However, rather then making educated guesses, this gives me a rough guide of what to expect in RE based on past years data.

I've listed the simplified categories below.

Taxes:

  • Income (US+State)
  • Property
Mandatory Expenses:
  • Food (dining and groceries)
  • Insurance (home, liability)
  • Utilities
  • Home Maintenance
  • Medical & Dental
  • Auto
  • Personal Care
  • Clothing
Discretionary Expenses:
  • Travel
  • Household
  • Gifts & Charity
  • Recreation
  • Hobbies
  • Miscellaneous
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Old 07-30-2017, 07:45 AM   #63
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I stopped doing a budget not long after retirement. The house is paid off. Medical is taken care of through Medicare and Tricare. Plenty of clothes as long as they continue to fit and t-shirts and jeans are cheap. Wife doesn't care for jewlery, make-up, drinking, smoking, or cut flowers. Although after 30 years I finally found a diamond ring to buy her that she loves. We have SS and small pensions that take care of food, insurance, taxes, etc. The money we saved is more than enough to buy cars, take trips when we want, and fund our hobbies way beyond our expiration date. With that being said we have always been happy with simple things in life. Wife has her tennis and I have my bicycle, motorcycle, vegetable garden, and pottery. I enjoy volunteering a radio show at the local PBS, a cat rescue facility, and the local zoo. Life is full and good. It's nice not having to worry about budgets anymore. I had enough of that for the years leading up to retirement and saved to make sure it would no longer be an issue.

Cheers!
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Old 07-30-2017, 08:02 AM   #64
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Never budgeted.
Paid all the important stuff first. Like mortgage, (I owned my own homes since age 23, except for a few in between years) utilities, bought used transports, lived cheaply otherwise. No intention of of ever budgeting.
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Old 07-30-2017, 09:40 AM   #65
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We don't budget we just track spending broadly, if there is something that comes up we just deal with it.
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Old 07-30-2017, 09:43 AM   #66
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Quote:
Originally Posted by Katsmeow View Post
For toy/fun purchases. We each do those kinds of purchases from our respective spending money. This is great since it reduces any possibility of someone thinking the other is spending too much money on X. If DH wants to buy a $200 piece of software that I have no interest in -- fine. It comes out of his spending money. If I spend $50 on the new expansion of Hearthstone, that is fine with him since it comes out of my spending money. Typically the things that come out of spending money are the fun things and our personal computers/electronics.
We have some his and her budget categories, too, but for us it is some of our travel and entertainment spending because those were the areas we tended to disagree on spending priorities. It has also worked out well for us, too, as now we can each spend want as long as we stay in the general budget amount.
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Old 07-30-2017, 09:16 PM   #67
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We do use Quicken to track spending categories but frankly don't use the reports function often. We use a monthly spreadsheet that has our sources of income (primarily pension and SS) and then subtracts out expected expenses such as utilities, HOA fees, groceries, outstanding cc charges, savings for the month and the like and shows what the remaining discretionary spending is. Except for late summer/early fall when the "lumpy" expenses of property taxes, house insurance, car insurance and umbrella policy all come in within three months if we have a positive cash flow then all is well. During that time cash flow may be neutral or even a bit negative for a while but since it is expected it isn't a big deal.

And running in the background is the expectation of vehicle replacements and major home maintenance items like a new furnace, roof, and the unexpected stuff like the time we had to replace the water line from the meter at the street to the house.

The NW is higher now than at any time in our lives so I guess we're doing something right. Or not, since we're apparently not spending enough.
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Old 07-31-2017, 03:38 AM   #68
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I put the first 4 into miscellaneous, and I have the later 3 separate.
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Old 07-31-2017, 06:38 AM   #69
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Quote:
Originally Posted by braumeister View Post
Maybe some people just don't understand what a budget is.



So call it a spending estimate instead.

I also find that the fewer categories you have, the easier it is to keep track of spending. No need to get down to unrealistic detail unless your total spending outlay is really tiny.
Agree. I use a spreadsheet. I have changed our categories many times over the 2-3 decades I have been budgeting. Generally, one section for all income items (including income taxes), one section for general expenses (like cash, clothing, eating out gifts, donations, etc), one for travel, one section for each of our four homes,etc. Maybe 40-50 lines in total. If I use "cash" I call it cash as I don't generally try to categorize such as it is a small portion of our expenditures. Maybe 5% and stable. Also, no accruals. Budgetted when paid. Have no debt so it's pretty easy.

Each month I "balance" to my checking account. That is, I take my opening cash balance add all income items, deduct all expenses, and make sure this equals my checking account at month end.

At the beginning of the year we decide if we will include in next years budget amounts for large expenditures like cars, major repairs, extra travel, etc. We have current year plus next two years in the budget although tend to spend more time on current year and into the next year. Most years I go over "budget" and don't try very hard to live within it, That makes it more of a "spending estimate" than an actual budget. Exception was 2008/2009 when I really did put the spending breaks on. But only briefly.

Over the years I have complicated things quite a bit by running two currencies through it using a fixed monthly FX rate, incorporated all savings accounts, included all investment balances in a separate section, etc. Really quite involved. It helps (hinders?) that both of us are CPA's.

I wouldn't recommend my system to others. Use what works for you or don't use anything if you don't need to. Having said that, I would be lost without my "budgie" probably because I need to have control which requires knowledge.
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Old 07-31-2017, 08:31 AM   #70
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I don't budget...never have and never will. When I need or want something, I just go out and buy it.

Once, a few years ago I made up an excel spreadsheet to track spending but quickly realized it was a waste of time as my monthly expenses on average were less than my monthly income.
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Old 07-31-2017, 10:58 AM   #71
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Quote:
Originally Posted by Music Lover View Post
I don't budget...never have and never will. When I need or want something, I just go out and buy it.

Once, a few years ago I made up an excel spreadsheet to track spending but quickly realized it was a waste of time as my monthly expenses on average were less than my monthly income.
Happy to see someone else with this approach.

I will admit that I have a rough cut retirement budget; but, I cannot see myself agonizing over it. Minimizing spend comes naturally to me.
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