Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
- Posts: 857
- Joined: Tue Nov 15, 2016 3:20 pm
- Location: New Jersey
Ron Scott wrote: ↑
Sat Feb 03, 2018 10:02 am
we'd have a budget so we would spend more...
^This is an important reason for having a budget in retirement.
FWIW, I never prepared a budget while working (we lived well below our means so it seemed unnecessary). Now in retirement (entering third full year in 2018) I prepare a budget and track spending against that budget. Not only to ensure discipline in our financial lives, but to try and ensure we spend “up to” the level of our means.
Real Knowledge Comes Only From Experience
- Posts: 343
- Joined: Fri Sep 05, 2014 2:05 pm
Sort of, but it is fluid. As long as we live well beneath our means (and we do), I don't stress too much about it.
- Posts: 1041
- Joined: Sun Feb 26, 2017 2:08 pm
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?
We don't live on the budget as we always live below our means. We use budget as a tool for planning and maximize saving purposes. Like someone said above: "What get measured, get managed". Using budget as part of planning, we are able to look ahead 1 year, 3 year, 5 year, 10 years, and execute an optimal plan for spending and saving. It focuses on long-term and maximize our net worth in the long run. We don't make like C-suites in Fortune 500 companies make, but we are good at generating more savings where most people without a plan or goals don't usually see it.
- Posts: 7
- Joined: Sun Jul 23, 2017 9:17 am
We transfer a certain amount to our checking account and we live off of that.
- Posts: 1713
- Joined: Fri Sep 20, 2013 11:40 pm
I do what I call after-the-fact budgeting.
Like many of the previous commenters, my technique has long been 1) save, 2) pay necessary expenses, 3) spend what I want from the remainder ... or save it. I've been keeping track of my expenses in Quicken for over 2 years and can see how I'm doing over the month(s) and year(s).
This data enabled me to plan realistically as retirement approached. Now in my 4th year of retirement, my challenge is to hit my spending target, which I missed last year.
Budgeting can be an important tool for people who have trouble controlling their spending or whose income presents challenges for living the lifestyle they are aiming for. My personal temperament made it unnecessary even when my income was very tight.
- Posts: 554
- Joined: Thu Mar 06, 2014 10:43 pm
No budget for us.
Earlier in my career we “paid ourselves first”. We maxed out our 401k and ESPP and then lived on the rest.
As our income grew, we did not increase our spending proportionately. So we started saving more and more. We only began “loosening up” about 10 years ago (about the same time we paid off the mortgage).
It helps that I cured myself from needing “stuff” about 15 years ago. The house is nicer when it is less cluttered. I’ll never rent a storage unit and I always leave room for 2 cars in the garage.
- Posts: 16
- Joined: Sun Jun 08, 2014 7:49 am
Traveller wrote: ↑
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.
This is how we do it to. A worksheet on the refrigerator with our spending allowance for the month and we keep track of our expenses there, deducting as we go. I use Mint to capture the exact categories. One plus to this method is we no longer have discussions about what we should or shouldn't splurge on. We simply say 'will the refrigerator allow it?'
- Posts: 364
- Joined: Mon Sep 29, 2014 1:47 pm
I do that pay yourself thing which I suppose backs us into a budget.
We live on what is left over after we pay into all of our retirement accounts and pay an extra 2K at mortgage.
That doesn't leave us with a lot but enough to be happy.
- Posts: 772
- Joined: Sun Feb 25, 2007 6:39 pm
- Location: Sterling, VA
I make out a general budget. I do not write anything down. Working two jobs and sometimes three jobs makes me disciplined. Other than my day job, the other jobs are fun. Today I will be reffing three lacrosse games in the afternoon. In the fall, I ref volleyball during the weekdays, and on the weekends, lacrosse games. Sports is a passion of mine, so it is fun getting paid to do it. I am more disciplines with money when I am reffing.
From Jack Brennan's "Straight Talk on Investing", page 23 "Living below your means is the ultimate financial strategy"
- Posts: 4220
- Joined: Wed Jan 11, 2017 8:05 pm
I track our overall spending, but I don't break it down and there is no hard limit. I do look at our credit card bill and if there is anything that looks like we could have done better I will bring it up in our monthly review.
- Posts: 2966
- Joined: Thu Oct 15, 2015 3:53 pm
Not really. But I track expenses in Quicken. I look at the total I spent for the year compared to the prior year. I also compare categories compared to the prior year. Using this, I make a mental note sometimes that I should watch spending on X. Sometimes I spent more but it was justified for whatever reason so I ignore it.
- Posts: 2607
- Joined: Mon Feb 26, 2007 5:33 pm
We did budgets in the past, but in our retirement we simply live below our means = no problems.
- Posts: 4665
- Joined: Tue Jun 10, 2014 1:14 am
I haven't needed one. I'm just frugal by nature, so I carefully consider every purchase. I sometimes assemble spending information for planning purposes, but not for spending purposes.
This week's fortune cookie: "Your financial life will be secure and beneficial." So I got that going for me, which is nice.
- Posts: 1537
- Joined: Tue Apr 08, 2014 3:23 am
Actually have never had a budget. We did toy with it a few times but never got serious about it and never even stuck with quicken more than a month or few trying to log expenses and categorize. We live below our means and have more than we will likely spend in our lifetimes.
When I was a student, FAid made a sample budget for me but I lived below that as well. We tend to be pretty good about living below our means so have no stress about that. We also tend NOT to be impulse purchasers.
- Posts: 926
- Joined: Thu Jan 17, 2013 12:32 pm
basically 1 paycheck covers my monthly obligations + fun [I "splurge" on weekends, life needs to be enjoyed too].
i can save/invest approximately 50-60% of my net income each month, even with the splurging. I do not use spreadsheets and all that, no need to overcomplicate something that's easy to do with auto contributions / transfers.
- Posts: 104
- Joined: Thu May 25, 2017 11:34 am
I track our spending.
We spend without remorse on items we need (groceries, shelter, healthcare). We next spend money pretty freely on things we really want (infrequent trip to a restaurant, simple entertainment, modest vacations). We tend not to spend money on "sort of wants" (random trinkets, concert tickets, etc). The above system makes us plenty happy and produces a savings rate of 70%.
So the answer to your question is that we don't budget, and I think our system is better than budgeting (contingent on properly distinguishing between needs, really wants, and sort of wants).
I don't believe that increasing our spending rate would increase our happiness one iota (especially after properly accounting for forgone consumption or time spent in cube in future as a result of increased consumption today). I think that decreasing our spending would marginally reduce our happiness (even after accounting for increased consumption in future).
I blog. My effective (not to be confused with statutory) MTR is 45% (fed + state, excluding payroll). I save $30k/year in taxes by maxing out deferrals. Taxes are the lowest hanging source of alpha.