Do you live on a budget?

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Ron Scott
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Do you live on a budget?

Post by Ron Scott » Sat Feb 03, 2018 8:07 am

I have never lived on a budget and being recently retired I don't even try. We spend far less than any SWR theory would allow. 'cest la vie.

How about you?
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

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Cobra Commander
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Re: Do you live on a budget?

Post by Cobra Commander » Sat Feb 03, 2018 8:13 am

Not really. Obviously we considered our income and expenses when buying a house but otherwise we dont have a budget. We dont buy a lot of stuff and we're naturally relatively frugal so not tempted to buy everything we see.

remomnyc
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Re: Do you live on a budget?

Post by remomnyc » Sat Feb 03, 2018 8:17 am

Kind of. I have a savings budget. I spend everything else. Big lumpy expenses come out of the emergency fund which is added to the savings budget when it gets too depleted.

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Toons
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Re: Do you live on a budget?

Post by Toons » Sat Feb 03, 2018 8:21 am

We did for decades using Quicken.
No more.
The budget assisted us in not having to think about a budget anymore.
Live Beneath Your Means.
Save/Invest
Options when we wake up.
Retired.





:P
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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JPH
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Re: Do you live on a budget?

Post by JPH » Sat Feb 03, 2018 8:23 am

No need to budget. I just live beneath my means.
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RRAAYY3
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Re: Do you live on a budget?

Post by RRAAYY3 » Sat Feb 03, 2018 8:31 am

It’s a very “loose” budget.

I basically sweep 1/4 of my net income into my taxable investments each month, pay bills, enjoy my weekends, if there’s extra left it goes to savings/investing as welll

I end up saving/investing at least 40% of my income (usually around %50) each month - I could do more, but I also like enjoying life. I consider myself frugal, but the frugal thread on here puts me to shame in some cases.

I try and strike a good live / save balance. Whatever floats your boat !
Last edited by RRAAYY3 on Sat Feb 03, 2018 8:32 am, edited 1 time in total.

basspond
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Re: Do you live on a budget?

Post by basspond » Sat Feb 03, 2018 8:32 am

We have a specific amount to save and give, but no other budget. It helps that we are penny pinchers.

smitcat
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Re: Do you live on a budget?

Post by smitcat » Sat Feb 03, 2018 8:36 am

Ron Scott wrote:
Sat Feb 03, 2018 8:07 am
I have never lived on a budget and being recently retired I don't even try. We spend far less than any SWR theory would allow. 'cest la vie.

How about you?
Somew would say that since you carefully analyzed your potential SWR and always know you are well below that level that you are in fact within a predetermined budget that you have been working on for quite a lomg time.

stoptothink
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Re: Do you live on a budget?

Post by stoptothink » Sat Feb 03, 2018 8:37 am

Nope, never have. We live way below our means; I am naturally almost obsessively frugal and my wife is (by most standards) very frugal herself. No point really.

timmy
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Re: Do you live on a budget?

Post by timmy » Sat Feb 03, 2018 8:40 am

We've mostly followed "pay yourself first".
Last edited by timmy on Sat Feb 03, 2018 1:22 pm, edited 1 time in total.

Jags4186
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Re: Do you live on a budget?

Post by Jags4186 » Sat Feb 03, 2018 8:53 am

Yes and no. We track everything and LBYM. I put pretend budget amounts into mint just to keep myself in check but I don’t worry if I go over one month. It’s more trend tracking.

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blueblock
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Re: Do you live on a budget?

Post by blueblock » Sat Feb 03, 2018 8:55 am

Yes and no. I start the year with my planned year's expenses in my checking account and hope that covers me to December 31st. It usually does. Otherwise I don't track.

gundlached
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Re: Do you live on a budget?

Post by gundlached » Sat Feb 03, 2018 8:57 am

Yes I used mint and now quicken. Without a budget I spend my entire check.

22twain
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Re: Do you live on a budget?

Post by 22twain » Sat Feb 03, 2018 8:58 am

Ron Scott wrote:
Sat Feb 03, 2018 8:07 am
I have never lived on a budget and being recently retired I don't even try. We spend far less than any SWR theory would allow.
Same with us. The only thing we've ever "budgeted" for in the sense of setting an amount in advance, is contributions to our retirement plans (403b). While we were still working, we kept an eye on the levels of our checking accounts, kept enough in them to cover irregular large expenses (vacations, major repairs, new cars, etc.), and between those large expenses, made sure those accounts grew slowly but steadily. Now, our spending rate is less than 2% of our portfolios per year. When we're both collecting Social Security in a few years (we're both delaying until age 70), it will cover most or all of those expenses. We know we have "room" to spend more, but inertia in lifestyle comes into play here.

All this probably says more about our lifestyle and cost of living in a small rural town, than about our incomes relative to most other people here.
My investing princiPLEs do not include absolutely preserving princiPAL.

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Tycoon
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Re: Do you live on a budget?

Post by Tycoon » Sat Feb 03, 2018 9:05 am

Nope.
Emotionless, prognostication free investing. Ignoring the noise and economists since 1979. Smart ≠ Rich. Rich ≠ Smart. Some are predisposed to consistently lose money. Don't be a sheep.

Dottie57
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Re: Do you live on a budget?

Post by Dottie57 » Sat Feb 03, 2018 9:11 am

No.

I have always put money away in investing /savings first. Then spent. Left overs in savings account. Works well for me. I guess I don't have a large spending gene. It helps to not go shopping except for groceries
Last edited by Dottie57 on Sat Feb 03, 2018 9:14 am, edited 2 times in total.

TwstdSista
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Re: Do you live on a budget?

Post by TwstdSista » Sat Feb 03, 2018 9:11 am

Maybe?

We have a budget and we adjust the budget yearly. And we even pay attention to the budget vs. our actual spending. But said spending seems to be in line with the budget most of the time. The categories that we go over budget on tend to be the same categories every year (gifts and personal, such as hair and clothes). And I'm the problem there. I finally increased the gift budget this year, but I'm trying to stay firm on the personal budget.

mortfree
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Re: Do you live on a budget?

Post by mortfree » Sat Feb 03, 2018 9:14 am

I keep track of income and expenses in excel.

It helps to know how my expenses (utilities, etc) vary throughout the year and to know my fixed payments (mortgage, car payments, daycare, savings for escrow, etc).

I’m more into tracking my finances and it helps that I only use what is left after 401k contributions.

jehovasfitness
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Re: Do you live on a budget?

Post by jehovasfitness » Sat Feb 03, 2018 9:17 am

Yes, but like dieting around desserts we usually splurge and go over.

Now we are taking it more seripus and last month came in under budget for the first time in over a year, hoping it continues.

Use Mint

ThePrince
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Re: Do you live on a budget?

Post by ThePrince » Sat Feb 03, 2018 9:24 am

gundlached wrote:
Sat Feb 03, 2018 8:57 am
Yes I used mint and now quicken. Without a budget I spend my entire check.
+1

Cmpliance
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Re: Do you live on a budget?

Post by Cmpliance » Sat Feb 03, 2018 9:38 am

Wife and I have a monthly budget established in Mint. The majority of the budget categories are required monthly expenses (mortgage, bills, insurance, etc.) and then we have budgets such as:

- Food & Dining which allows us to "splurge" on a nice dinner depending on where we stand in the budget for the month. This also includes any small food purchases like fast food and social outings such as bar tabs. This is budgeted for $700 and we have consistently gone over this by a couple hundred, so we are working on figuring out where we need to "save" to bring it back in line.
- Shopping which usually consists of random things that we need as a couple (e.g. If we want a furniture for the house, bedding, new TV, etc.)

Then we have a "Personal" budget which every month $200 is fed into these budgets for both myself and my wife. Assuming we stay within the budgets we established for the month, we are free to spend this $200 for whatever we want. Usually my wife spends it on makeup, spa days, clothes, etc. I myself usually don't use it so right now I have a couple thousand dollars allocated to this personal budget, but I likely won't ever buy something. I rather invest it.

Although it may not seem like it for some, the budgets allow us to enjoy life and still save 50% of our paycheck for future desires (house, travel, etc.)

Topic Author
Ron Scott
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Re: Do you live on a budget?

Post by Ron Scott » Sat Feb 03, 2018 10:02 am

smitcat wrote:
Sat Feb 03, 2018 8:36 am
Ron Scott wrote:
Sat Feb 03, 2018 8:07 am
I have never lived on a budget and being recently retired I don't even try. We spend far less than any SWR theory would allow. 'cest la vie.

How about you?
Some would say that since you carefully analyzed your potential SWR and always know you are well below that level that you are in fact within a predetermined budget that you have been working on for quite a long time.
Let's put it this way. We believe in a SWR of about 3% but spend just under 2% of investable. This is the influence of my better half, and I WISH we'd have a budget so we would spend more...
Retirement is a game best played by those prepared for more volatility in the future than has been seen in the past. The solution is not to predict investment losses but to prepare for them.

Rattlesnake
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Re: Do you live on a budget?

Post by Rattlesnake » Sat Feb 03, 2018 10:13 am

The short answer is no.... Not since we've been retired...
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Halicar
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Re: Do you live on a budget?

Post by Halicar » Sat Feb 03, 2018 10:21 am

JPH wrote:
Sat Feb 03, 2018 8:23 am
No need to budget. I just live beneath my means.
I don't think those two things are mutually exclusive. In my experience, keeping very close track of where my money goes allows me to optimize my spending and saving.

Slacker
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Re: Do you live on a budget?

Post by Slacker » Sat Feb 03, 2018 10:27 am

Savings and investing budget primarily (or maybe I should say "only").

We hit our target savings goals and otherwise try to wisely spend our money without specifying a budget for other items.

winterfan
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Re: Do you live on a budget?

Post by winterfan » Sat Feb 03, 2018 10:32 am

No budget. We pay ourselves first and then live on the rest. Any extra gets added to savings/investments. We could probably save more with a budget, but we're pretty happy with our progress.

Traveler
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Re: Do you live on a budget?

Post by Traveler » Sat Feb 03, 2018 10:38 am

Kind of. I make an annual budget broken out by month and then track my spending based on various categories within it. I don't worry about monthly over/under but primarily look at the bottom line annual - am I saving what I said I'd save. If I'm off a thousand or two, no worries.

Jon H
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Re: Do you live on a budget?

Post by Jon H » Sat Feb 03, 2018 10:43 am

Savings rate 35%
Live beneath our means.

Have played with mint and excel budget methods and we are usually way under.

So, no need to budget except to make sure we are funded for anticipated large items.
Consider gain and loss, but never be greedy and everything will be alright (fortune cookie)

ubermax
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Re: Do you live on a budget?

Post by ubermax » Sat Feb 03, 2018 11:56 am

Also retired , not sure if what we do is a budget or an "expense organizational tool" but each of our 4 monthly inflows go via spreadsheet into 17 buckets , 16 of which have specific names , i.e. "electric" and the 17th is labeled discretionary - it's basically what's leftover after those 16 are filled and is used mainly for charge card expense - in the past we got into situations where it took a few months to pay off the "cards" and so now we look at our card expense during the billing cycle and compare it to the amount in the discretionary bucket - this helps us determine if we need to pulls on the reins or can still gallop a bit more :happy - large ad hoc purchases , e.g. new car or furnace take some additional thinking i.e. buy , finance , or lease since we are top heavy with tax deferred accounts :(
Last edited by ubermax on Sat Feb 03, 2018 12:03 pm, edited 1 time in total.

khangaroo
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Re: Do you live on a budget?

Post by khangaroo » Sat Feb 03, 2018 11:58 am

Yes, I have an excel spreadsheet generated every 2 weeks to allocate where each paycheck goes. It goes somewhat like below, there are subsets within these categories like in savings I have kid's college, Roth IRA, taxable accounts, etc.

Line 1 = Main Income (+)
Line 2 = Side Income (+)
Line 3 = Cash expenses (-)
Line 3 = Savings (-)
Line 4 = Bills (-)
Line 5 = Credit cards (-) <= this is what my weekly budget is to spend on all misc. costs like eating out, gas, entertainment, etc. I try to pay it off each 2 weeks but it's not that big of a deal if it goes over because interest doesn't get charged if you make payments that total more than last month's credit balance. I haven't paid a penny of CC interest since I started using credit cards at 18 and now 29.

I've been doing this since 2012 when I got a "real" paycheck. Helps me keep my spending in check and I like tracking my saving/spending history. I'm a big spreadsheet nerd and if I can put anything on a spreadsheet, I will :beer

UpperNwGuy
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Re: Do you live on a budget?

Post by UpperNwGuy » Sat Feb 03, 2018 12:01 pm

Yes, I live on a budget. I track it in Moneydance. For many years I was a spendthrift and accumulated some large credit card debts. Once I put myself on a budget, I paid off the debts and started saving and investing. A budget really works for me!

ThePrince
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Re: Do you live on a budget?

Post by ThePrince » Sat Feb 03, 2018 12:13 pm

Halicar wrote:
Sat Feb 03, 2018 10:21 am
JPH wrote:
Sat Feb 03, 2018 8:23 am
No need to budget. I just live beneath my means.
I don't think those two things are mutually exclusive. In my experience, keeping very close track of where my money goes allows me to optimize my spending and saving.
+1

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willthrill81
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Re: Do you live on a budget?

Post by willthrill81 » Sat Feb 03, 2018 12:23 pm

Yes. We actually have 'two' budgets in one. The first is a budget of (mostly) 'regular' monthly expenses that don't vary much from one month to the next. Our second is a budget of irregular expenses (e.g. gifts, clothing, HOA dues, auto taxes and maintenance) where we save every month 1/12 of our estimate annual expenses in each category. Doing the latter has greatly helped us to smooth out our expenses (i.e. a $1k auto repair bill would just be paid from our irregular expense fund and not result in us doing anything else at all) and improve our planning.

That being said, I think that when possible, you should determine your desired savings rate, automate those savings, and then spend the rest as needed. As long as you don't go into debt, it's hard to go awry this way.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings

Chris K Jones
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Re: Do you live on a budget?

Post by Chris K Jones » Sat Feb 03, 2018 12:31 pm

I never have. Trying to get a handle on my expenses now so I can figure out how much I might need annually when I retire.

The Wizard
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Re: Do you live on a budget?

Post by The Wizard » Sat Feb 03, 2018 12:42 pm

Five years into retirement, my main budgetary metric is simply not to spend more than my monthly income, on average.
Now that could be tricky under some circumstances, but my routine expenses are less than half my net income, so not too hard to manage.
Note: I do need to put more thousands away to buy a new car in a few years, so need to apply some focus to that...
Attempted new signature...

dekecarver
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Re: Do you live on a budget?

Post by dekecarver » Sat Feb 03, 2018 12:47 pm

No. My or my family needs and wants have never required a budget. I learned as a 12 year old delivering the morning paper, getting expenses in line with income always resulted in savings and wealth accumulation. For me I always figured if I had to worry about outflow, I then had a problem that I didn't want to deal with therefore never let that problem get started.

To the best of my recollection, I sat down one day and figured out how much money I had, how much I was making and then decided how much house I could afford without having to worry about it and then bought a house. Same goes for other things like vacations, toys, tools, etc; no budgeting no fuss. Works for me.

cmeretire
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Re: Do you live on a budget?

Post by cmeretire » Sat Feb 03, 2018 12:53 pm

I loosely track expenses in my head .. But, I do watch what the bills are when then come in and just being aware of what we are in general spending. We have never had a formal budget and have always saved and LYBM. As long as we meet our savings goals, DW and I are free to spend what we want without ever worrying about what the other may say or think. I will say though that we have never been in the "We need a new car every 3 years crowd" or the "keep up with the Jones crowd".

DrGoogle2017
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Re: Do you live on a budget?

Post by DrGoogle2017 » Sat Feb 03, 2018 1:43 pm

No budget here, but the first two years of retirement, we spent far more than I thought we would, c’est la vie.
But there’s hope on the horizon. I’ve made a decision recently that after this year, we will only go on vacation up to the duration of one month, easy to hold mail from the post office. That surely would help with our budget. But frankly, that’s our limit to being away from home. Luckily, I was planning to do 3 months in Europe to celebrate our 30 anniversary. Now it’s going to be 30 days.

A-Commoner
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Re: Do you live on a budget?

Post by A-Commoner » Sat Feb 03, 2018 2:00 pm

We had a strict budget when we started out our careers after residency training. After we established our spending patterns (which took 2 years to be at equilibrium) we didn’t look too strictly at the budget anymore. I already had an intuitive sense of what our budget was. What I still do now is check our bank account balances month to month. If there is a surplus, that means we have positive cash flow, regardless of what we may have spent the money on. That surplus is then plowed into stock and bond mutual funds in our taxable accounts. As long as cash flow is positive, I don’t pay too much attention to the details.

jeff1949
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Re: Do you live on a budget?

Post by jeff1949 » Sat Feb 03, 2018 2:10 pm

No budget because we have always lived below our means. Some people need budgets and they are usually those who live pay check to pay check which, unfortunately, includes most all of our 5 children and their spouses.

:confused

Traveller
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Re: Do you live on a budget?

Post by Traveller » Sat Feb 03, 2018 2:15 pm

Yes, in our own way. We only budget our discretionary spending (gas, fun, cash, groceries, restaurants, clothing, entertainment, etc.) in total (e.g. $x,xxx / month for everything). We don't care how it gets divided between the various subcategories, we just try to keep it below the total of discretionary spend for the month.

NotWhoYouThink
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Re: Do you live on a budget?

Post by NotWhoYouThink » Sat Feb 03, 2018 2:17 pm

We spend what's left over after we save and give. Sometimes we don't spend it all, but we always save and give per the plan.

I tracked spending for the last couple of years mostly to educate myself on what the big drivers are, and to plan retirement spending, because we're about to quit having paychecks to save anything from. Probably there is some mental spend limiter that we both have, set at about the same threshold. If we had to track every purchase and give every dollar a job and talk about it every month we'd have divorced or killed each other by now. But if you can do that and keep your sanity, have at it.

MOBugeater
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Re: Do you live on a budget?

Post by MOBugeater » Sat Feb 03, 2018 2:39 pm

Yes - I have a spreadsheet that I've kept since 2001 - we track/budget the recurring items (house, insurance, HOA, util, etc) and other non-recurring but still needed to track (medical, misc). We also have another checking account where every 2 weeks a portion of paycheck is direct deposited to account for food, gas, eating out, misc items - and we don't track that - can spend to 0 every 2 weeks. That is a nice balance of budgeting/tracking with not having to track every little receipt.

2015
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Re: Do you live on a budget?

Post by 2015 » Sat Feb 03, 2018 2:39 pm

Since forever. What gets measured gets managed.

runner540
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Re: Do you live on a budget?

Post by runner540 » Sat Feb 03, 2018 3:05 pm

2015 wrote:
Sat Feb 03, 2018 2:39 pm
Since forever. What gets measured gets managed.
+1000

Ron
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Re: Do you live on a budget?

Post by Ron » Sat Feb 03, 2018 3:26 pm

My wife put me on a budget when we first got married, some 48 years ago. Money was tight for an enlisted guy in the USAF with a wife and child to support and I/we learned to do with very little for many, many years.

Now that I'm a graybeard, retired, and we're fortunate to be financially independent, I still go to the ATM twice a month (same as when I was still working), do a withdrawal and put those $20's in the appropriate envelope https://www.daveramsey.com/blog/envelop ... -explained ...

- Ron

smitcat
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Re: Do you live on a budget?

Post by smitcat » Sat Feb 03, 2018 3:45 pm

Ron Scott wrote:
Sat Feb 03, 2018 10:02 am
smitcat wrote:
Sat Feb 03, 2018 8:36 am
Ron Scott wrote:
Sat Feb 03, 2018 8:07 am
I have never lived on a budget and being recently retired I don't even try. We spend far less than any SWR theory would allow. 'cest la vie.

How about you?
Some would say that since you carefully analyzed your potential SWR and always know you are well below that level that you are in fact within a predetermined budget that you have been working on for quite a long time.
Let's put it this way. We believe in a SWR of about 3% but spend just under 2% of investable. This is the influence of my better half, and I WISH we'd have a budget so we would spend more...
Ahh - But IMHO you do have a budget, perhaps not the one you exactly seek but a budget nonetheless. It must have taken quite a long time to carefully figure out an accurate 3% SWR across your invested assets and incomes. And by knowing you are always spending 'just under 2%" carefully tracking your expenses. Accurately tracking expenses and incomes is indeed a budget in our eyes anyway. I guess the challenge with your budget is to figure out where the excess funds will go when you do not require them anymore.

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TheAccountant
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Re: Do you live on a budget?

Post by TheAccountant » Sat Feb 03, 2018 3:50 pm

I do. I use a simple spreadsheet that has a calendar on it with my checking account balance on the bottom of each day. Budget on the left, transactions plotted on the calendar throughout the month. All automated. It really helps when deciding how to invest/save. I keep a one month float in checking, the rest is in savings or invested.

For those of you who claim to live below your means - how do you know if you don't track it? I've seen far too many people thinking they are being frugal when they are bleeding cash without even realizing it.
Making cents out of every dollar.

reggiesimpson
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Re: Do you live on a budget?

Post by reggiesimpson » Sat Feb 03, 2018 3:54 pm

Nope......and I enjoy it.

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Kalo
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Re: Do you live on a budget?

Post by Kalo » Sat Feb 03, 2018 4:00 pm

I live on a budget, but not always within the budget. It still serves as a useful tool because even if I run over budget, at least I know I have done it. Nothing would feel worse to me than not knowing how far over or under, and where that extra money went. It's just a plan; not set in stone.

Also, there is an interesting side benefit that I never thought of when I started living on a budget. It allows me to feel good about spending on things I normally would feel a little guilty over. And then guilty for feeling guilty. A good example is gifts. I budget for gifts, and this allows me to spend freely within my gift budget and to enjoy it, and not feel guilty, and then guilty about feeling guilty and cheap. So by budgeting at the start of the year in an honest way with myself, figuring out what I want (and can afford) to spend on my loved ones, I am then freed up from all those feelings about what I can afford, and also if I'm spending too much on the variable expenses.

I use MS Money sunset edition and it works very well. I have yet to spend under my budget, but this is only my second year, and I think I did a better job for 2018 in creating a realistic budget than I did for 2017. Time will tell. I already went over in January. Such is life.

Kalo
"When people say they have a high risk tolerance, what they really mean is that they are willing to make a lot of money." -- Ben Stein/Phil DeMuth - The Little Book of Bullet Proof Investing.

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