Anyone Use Zero-Based Budgeting?

[FLSUnFIRE]

Personally, I don't budget but do track and there is a feedback loop if any category gets out of whack.
I project next years spending based off history/expectations and call it a "budget" but it is to figure cashflow needs as I decide my WD to fund the year. I don't manage my spending against it.

When I was working I developed budgets and wanted/tried/pleaded to ZBB and cut out waste but alas I worked for the government and that wasn't going to happen... I may have mentioned that it was a bit soul-sucking.

 

[jollystomper]

During our working, accumulating years we budgeted, I guess one could call it "zero based", as we budgeted with a savings goal in mind, so that spending + savings = expected income. But it was usually more "we want to save $X (or X% of expected income), what does that leave us to spend, and how do we want (or hope) to spend it?"

Some of my income was bonus based, but we never budgeted that (nor did we expect base salary increases). We also had a "don't ask, don't tell" budget item for each of us - a monthly amount we each could choose to spend (or not spend and accumulate) on anything we wanted, without question from the other.

Now in retirement, we do not do any budgeting. Our desired spending is well below what various calculators and reports tell us is our "limit" in terms of running out of money. I started retirement monitoring cash flow, as we had set aside several years to cover spending beyond my pension and DW's SS income, but six year into retirement it is more a "spreadsheet interesting numbers" exercise instead of anything used to guide our spending.

 

[copyright1997reloaded]

Be aware that you can borrow some money and pay it back early next year... that is IF it would save you on whatever the IRMAA costs... I have no idea..

Thanks.
I actually did this in order to close on the place in July as I had remaining CD's maturing late July/early August. I also borrowed from a Roth (i.e. 60-day rollover) to make it happen. I've paid back the Roth withdraw and now have a minimal cash position (e.g. 10-15K or so). If necessary I will borrow but don't like the idea of margin (or other loans) if I can help it. I also hedged some Apple in late June (via a collar) by writing Jan 2025 calls at 240 and buying puts at 220. Since then when Apple was 216 or so I bought Jan 235 calls (to offset the 240 writes and thus unlimited upside). As of this morning I am decently net positive on these ($5/share on initial write/buy plus $6.95/share net on current option pricing) with the stock just slightly higher than when I opened the position. Hope this makes sense -> my objective doing this was to lock in a range for selling some Apple in Jan 25 w/o a 2024 taxable event.

 

[mystang52]

Old habits don't die, for me. We have always budgeted, but not ZBB. LONG LONG time ago, DW and I calculated every $$ spent for 2 weeks. Based on that, we allocated that amount for our biweekly spending. Over time we tweaked it a bit. Couple of years later had a 2nd epiphany when a bunch of bills came due, and we were short the $$ to pay them all. Then we went to a more formal budget. Don't need to budget anymore, but like I said habits don't die.

 

[MarieIG]

During our early marriage years, I used the envelope method. Later budgeting was less formal, but it was save first, pay the necessary bills, and look for creative ways to live on our income. I remember breakfasts for dinner at least once a week, a lot of chicken thighs for .29 cents a pound, and a savings envelope for "larger" purchases.

I don't formally budget, but I plan in advance how I am going to fund my major expenses, i.e. federal income tax, state income tax, property tax, home owner's insurance/ liability insurance, etc. I keep an emergency fund for unplanned expenses (last month our AC retired.) DH pays monthly bills on a monthly basis out of his pension income.