Knee-jerk and expense-tracking

[palomalou]

Does anyone else have a knee-jerk "think again, you can't afford it" reaction to the thought of spending any money? I have to laugh at myself, because I do though we could afford anything, pretty much, we could need, or even want. It seems to have come from my sweet husband, who has never told me I should't spend anything I wanted (he is our "business manager", not a "head of household" nor my lord and master) but we have been married almost 35 years and he has tracked every single penny we have ever spent. It really does have a magical effect to look at the spreadsheet "on track to spend this year..." figure every few days.

 

[COcheesehead]

No, I have confidence in my plan. I know if we don’t spend it, someone else will, so we don’t go hog wild, but we spend on things we value and don’t give it a second thought. We worked our whole life. Now it’s time to enjoy the fruits of our labor.

 

[aja8888]

No, I have confidence in my plan. I know if we don’t spend it, someone else will, so we don’t go hog wild, but we spend on things we value and don’t give it a second thought. We worked our whole life. Now it’s time to enjoy the fruits of our labor.

Good post COcheesehead!

Same here, and now that I am a widower, I'm just spending on whatever I want these days, as I am running out of days at my age.

 

[Gumby]

Our spending patterns have been consistent for a very long time, both prior to and since retirement. I don't see that changing anytime soon. We are happy with our lives as they are. I will note that our net worth, household income and spending are already north of the 90th percentile, so there's really not much more we could ever want to spend that we don't already spend.

 

[audreyh1]

Ask yourself and your DH - who is going to spend this money if we don’t?

That might help sharpen priorities.

Beware that close tracking isn't keeping score somehow and distracting from your important retirement goals.

 

[razztazz]

I don't think "I can't afford it" as much as I think "Do you really need that?" As if I have to "qualify" for the things I buy.

 

[latexman]

Does anyone else have a knee-jerk "think again, you can't afford it" reaction to the thought of spending any money? <snip> It really does have a magical effect to look at the spreadsheet "on track to spend this year..." figure every few days.

Maybe try to counter that effect by reading the BTD thread.

 

[audreyh1]

I don't think "I can't afford it" as much as I think "Do you really need that?" As if I have to "qualify" for the things I buy.

I can understand the “qualifying” to some degree. We (retirees) have priorities, and if something is high priority we spend pretty readily on it. We look for higher quality items and services - but also good value for the better quality. We really avoid junk and impulse buying on low priority items - that has not been a problem for a looong time.

But not spending unless you absolutely need something can be a trap.

It’s not black and white - loosening up the purse strings doesn’t automatically mean going hog wild on stuff that doesn’t matter.

 

[skyking1]

We are in the working mode yet, and quite frugal. I sock away xx every month and when the occasion arises that we can treat ourselves DW might hesitate but not me. That is bound to be a little different when we drop down to our projected fixed income.

 

[athena53]

We're all different. I'm single, so no one else's style influences me. I DO track expenses other than cash expenditures (which are minimal) because I want to see where I was compared to the previous year by category. About 40% of my expenses are charitable deductions and travel so I always find that reassuring- could be cut back if needed.

Having said that- I'm in the "You can't take it with you" camp. I withdraw $X per year and if I don't spend it, it goes to DS and DDIL or to the grandchildren's 529 accounts. Since assets after withdrawals are up on an average of 2% per year since I retired 9 years ago and I'm 70, I'm thinking I can increase $X. I just want to make sure that if I need LTC the money is there for that.

 

[Kings over Queens]

Does anyone else have a knee-jerk "think again, you can't afford it" reaction to the thought of spending any money? I have to laugh at myself, because I do though we could afford anything, pretty much, we could need, or even want. It seems to have come from my sweet husband, who has never told me I should't spend anything I wanted (he is our "business manager", not a "head of household" nor my lord and master) but we have been married almost 35 years and he has tracked every single penny we have ever spent. It really does have a magical effect to look at the spreadsheet "on track to spend this year..." figure every few days.

First reaction to reading this post had me thinking my wife found the website and joined.

I used to feel like we couldn't afford anything, despite being able. If it were up to me we wouldn't have spent any money, ever. To this day the only thing I spend money on is gas for my car and haircuts. Otherwise she is the chief procurement officer.

Funny story. A year or so ago I had Merrill run retirement analysis for us, they are affiliated with our 401k people, and I'd be eyeing up pulling the plug. Prior to the zoom meeting with the guy I gave her crap for spending like $12.00 on balsamic vinegar. Well, he shares the report with us and I was shocked at the projections. The results pushed me over the edge and solidified my commitment to FIRE, but all she could say was "so is it ok now that I can have vinegar?"

I have the same spreadsheets, it's just how I'm wired.

 

[Kings over Queens]

I don't think "I can't afford it" as much as I think "Do you really need that?" As if I have to "qualify" for the things I buy.

I look around my house every day and wonder "where the hell did that come from?"

 

[audreyh1]

I look around my house every day and wonder "where the hell did that come from?"

We went full time RVing back in 2005 and spent several months of 2004 and 2005 cleaning out the house and getting rid of stuff. I found things stashed away that had been gifts never used, and things we had bought and hardly used. We got rid of almost everything that didn’t go in the motorhome and put very little in long term storage.

So this really helps us not accumulate stuff. We have a small house now and there is just not room.

 

[Koolau]

For the most part, I don't think too much about buying stuff if we need it. What HAS hit me hard is the astounding price increase in SOME things (especially labor - for instance handy man, if you can find one) cars, appliances (which are junk compared to older vintages), travel, hotels, etc.

I don't track anything except looking at the check book balance occasionally.

 

[Philliefan33]

Old habits die hard. We were in saving mode at the same time as raising our daughters (so spending on their needs and wants). Now the DDs are on their own and we are FIRE so we should not be in saving mode, but the mindset hasn’t yet changed.

I’m doing a little better than DH when it comes to loosening the purse strings. We both will spend on the kids and grandkids, I’m starting to spend on myself but DH still balks at some spending. An example: he needs a new pickleball paddle. He spent about $140 three or four years ago on his current paddle. The new paddle he likes is about $200, and when he saw the price he said “I don’t need to spend that much”. Really? He won’t spend an extra $60 to get what he wants and will use 4-5 times a week? Silly man.

 

[Kings over Queens]

I don't mean to rag on my wife, but it's her.

I took over household stuff, including shopping, when she had her knees replaced last November. I had this place running like a top. Buying just enough food for meals that were planned in advance. I inventoried the fridge, and better, the freezer. I could find everything. Was glorious!

She finally was able to get down to the basement (we have a second kitchen and fridge there) and in her words, "about had a heart attack" because there was "nothing in the fridge."

Men hunt, woman nest.

 

[ShokWaveRider]

At this stage in our lives (69 & 65 resp) we consider ourselves lucky and humble enough to have saved all our lives for these years. I can safely say there is nothing we cannot afford (within reason) and nothing we think twice about from a financial perspective. Yes, we do analyze most large purchases between the two of us as to whether we really need something or whether it will add to the clutter.

We buy the best Medicare approved Part G plans we can (We would never cut corners with a "Dis"-Advantage Plan). We do get the cheapest part D plan as Our drugs are basically free, and we really do not need a drug plan at all, but we do not skimp on healthcare, eyecare or dental.

I consider us lucky, (Not Blessed) as we were fortunate to have had the opportunity to achieve our financial security. We still do not waste money though, that is programmed into our psyche.

 

[PaunchyPirate]

I meticulously track my spending. But I also pretty much buy whatever I want. I just like to see where the money goes. Plus I like graphs and charts a lot.

 

[Bryan Barnfellow]

We have continually refined our detailed budget process since the day we decided to pursue financial independence and early retirement (FIRE wasn't a word then). That was in 1992, some 31 years ago. We are very sure of our income and construct the outgo accordingly. We even continue to save--specifically for possible exchange rate surprises and any (exceedingly rare) cuts in dividends. We budget our dividend income on last year's dividends, to allow for a completely flat year. We have been lucky so far always to have had year over year dividend increases that exceed inflation.

We budget for our "needs" and our "wants" each year (including a contingency line for the inevitable knee jerk "gotta have it." Thus, when we spend on a "want"--travel, small, fun purchases, etc.--we always know that we have the money (up to the limits we have budgeted). For example, we budget 8% of our income on travel, which we use to its max. We never worry about it when travelling. Same for eating out, and so on.

We budget income (95% which comes from US-based dollar assets) on 0.88 USD to 1.0 CHF (Swiss franc) and generally have a year-end surplus from the actual (higher) rates that we get. I track the USD/CHF pair assiduously and move money to Switzerland at what I believe to be the most attractive moments.

We focus our disposable income (such as it is) on things like experiences, gifts to charitable causes, and helping relatives where we can, instead of toys, like new cars, second homes, etc. Not that we could ever afford even a first home here in Switzerland. We rent. And we own a small 2008 Hyundai "city car," which allows us local travel. Otherwise we use trains and occasionally take a flight. We are pretty much done with buying things.

That said, art is my weak spot. If there is any primary knee-jerk purchase this is it. But notice it is "art" with a lower case "a."

-BB

P.S. Oh, another weak spot is audiophile equipment. My wife is even on board with this "hobby" of pursuing the impossible.

 

[audreyh1]

I meticulously track my spending. But I also pretty much buy whatever I want. I just like to see where the money goes. Plus I like graphs and charts a lot.

I do too. Because we set this stuff up in Quicken decades ago, and I still download all transactions and reconcile all statements against receipts to verify accuracy.

But I only occasionally look at the spending reports. Yet it’s all there, tracked, whether I look or not, ha ha.

 

[Al18]

If you’re retired and have more than enough, then why are you recording all your expenses? Discuss it with your significant other and consider saving 50 hours per year and stop recording all expenses. I only record and track assets, so I have an idea of what we can spend each year. After 4.5 years of retirement, I still have more than I started with so we’re good.

You can’t take it with you.

 

[marko]

We spend what we want, when we want. Our lifestyle is pretty much the governor, but we do live quite high.

Of course, that private jet is out of reach-- and always has been--but the day may come for one of those pay-as-you-go deals.

What is interesting is that we spend pretty much the same amount every year...within $5k but just on different things. Again, our guardrails are our lifestyle rather then a set, excel sheet calculation.

 

[Koolau]

I do too. Because we set this stuff up in Quicken decades ago, and I still download all transactions and reconcile all statements against receipts to verify accuracy.

But I only occasionally look at the spending reports. Yet it’s all there, tracked, whether I look or not, ha ha.

Yeah, I tried it one year and I did find a few surprises - yet, the bottom line was virtually exactly what I expected. It's just that a few of the categories were higher or lower than I expected. YMMV

 

[Kings over Queens]

If you’re retired and have more than enough, then why are you recording all your expenses? Discuss it with your significant other and consider saving 50 hours per year and stop recording all expenses. I only record and track assets, so I have an idea of what we can spend each year. After 4.5 years of retirement, I still have more than I started with so we’re good.

You can’t take it with you.

Not retired yet, but I can tell you I will likely continue to track expenses, just because that's how I'm wired. Old habits die hard.

I don't claim to be rational.

 

[W2R]

Does anyone else have a knee-jerk "think again, you can't afford it" reaction to the thought of spending any money?

I can relate to this! I blame it on my Scottish ancestry. That, plus all the tales of hardship so many of our parents' generation experienced during the Great Depression.

It helps if I try to wait a few months between larger expenditures. My theory is that I can afford anything if I wait long enough before buying it.