Have you ever tracked your spending for a year?
Have you ever tracked your spending for a year?
Was wondering how many Bogleheads have tracked thier spending for a year in the past? Two ways to do it roughly, one is pretty hardcore, and to keep notes of basically where everything goes as one spends it, the other, is at the end of the year, kinda go through all spending and get a general picture of how much was spent on food, entertainment, etc..... The second way, has many varying degrees to it, from being pretty exact, to being very inexact.
- simplesimon
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If one uses a credit card for all spending outside of some online bill paying and savings/investing, then one has everything tracked for you. You are also not allowed to use cash or an ATM card.
The CC company sends you a nice year-end summary statement of where you spent all your money in nice categories. It's totally trivial and takes no time at all.
The CC company sends you a nice year-end summary statement of where you spent all your money in nice categories. It's totally trivial and takes no time at all.
- schnoodlemom
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Yes, I tracked spending to the penny for about a year and a half, ending about 6 months ago. I'm nearing early retirement, so I felt it was important to have a good handle on where I'm spending money.
I'm still tracking (though not to the penny) in Quicken. It's just that I have this big category called "miscellaneous" for cash expenditures. But having tracked spending so closely in the past, I now have a really good idea where those misc. expenses are going.
I'm still tracking (though not to the penny) in Quicken. It's just that I have this big category called "miscellaneous" for cash expenditures. But having tracked spending so closely in the past, I now have a really good idea where those misc. expenses are going.
catdude |
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All generalizations are false, including this one.
In Microsoft Money, ATM withdrawals can be assigned to any expense category that you wish.schnoodlemom wrote:Longtime Quicken user.... enough said. Although I do have a category for ATM cash withdrawals labeled "Where did it go?". Usually it's less than $500 annually. Amanda
Jim
Unless you try to do something beyond what you have already mastered you will never grow. (Ralph Waldo Emerson)
I enter a monthly budget and expenses in Excel; however, some of the categories are rather broad - e.g., living expenses which includes clothes, food small house maintenace items. I don't care to break it down farther. Other items, i.e., eating out, are more specific.
"I'm not so much concerned about the return on my money as the return of my money" - Will Rogers
I have tracked my expenses for the past 5 or 6 years and I have always come within 1 or 2% of my beginning of the year budget.
This has helped me in my retirement decisions, but I think it also indicates that I have not had any major, unexpected events occur. I consider myself very lucky on this aspect, but I am sure going forward something will happen that will break my steak of being within 2% of anticipated expenses.
This has helped me in my retirement decisions, but I think it also indicates that I have not had any major, unexpected events occur. I consider myself very lucky on this aspect, but I am sure going forward something will happen that will break my steak of being within 2% of anticipated expenses.
I know roughly what I spend in the various categories. I also know exactly, to the dollar, how much I place in investment/savings accounts. So long as I am contributing towards my investments/savings at my desired levels, I see no need to micromanage the rest. If I were living paycheck to paycheck, that would be another thing. I'm not going to freak out because I overspent $300 in the food category but underspent $50 in the insurance category, etc. I'm I'm buying something, I know if I can afford it or not.
I don't like categorizing the ATM withdrawals themselves. If I withdraw $100 and spend it over the course of 9 days on various things/categories, that's difficult to keep track of until the cash is exhausted.Sheepdog wrote:In Microsoft Money, ATM withdrawals can be assigned to any expense category that you wish.schnoodlemom wrote:Longtime Quicken user.... enough said. :-) Although I do have a category for ATM cash withdrawals labeled "Where did it go?". Usually it's less than $500 annually. Amanda
Jim
I use MoneyDance and created a 'Cash' asset account. ATM withdrawals use this category so it's essentially a transfer from my checking account into cash. I can then draw-down as I spend without having the entire amount disappearing on day one.
Last edited by empb on Mon Feb 15, 2010 5:04 pm, edited 1 time in total.
I've been tracking my expenses (nearly to the penny) all my adult life. Started when I left home to go off to college. Didn't have more than $2000 to my name. Supported myself through a student loan and part-time jobs. So it was very important to make sure I didn't run out of money.
I suppose after all these years, I can slack off a bit. But old habits die hard.
I suppose after all these years, I can slack off a bit. But old habits die hard.
Ignore the market noise. Keep to your rebalancing schedule whether that is semi-annual, annual or trigger bands.
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Typically, I go through my checking account and credit card statements at the end of each year and categorize my annual expenses into general categories.
In 2001 and again in 2009, however, I tracked all expenses to the penny (e.g., I spent $3.04 last year for two containers of bleach). That takes a lot of work but I've found it to be a worthwhile exercise to do on a periodic basis. One thing I've noticed is that my frugality is directly proportional to how closely I monitor my expenses. It really makes me think about each purchase.
In 2001 and again in 2009, however, I tracked all expenses to the penny (e.g., I spent $3.04 last year for two containers of bleach). That takes a lot of work but I've found it to be a worthwhile exercise to do on a periodic basis. One thing I've noticed is that my frugality is directly proportional to how closely I monitor my expenses. It really makes me think about each purchase.
You bet!
Yep sure have tracked my spending,,,To the penny for 10 years in Quicken,,,,my wife says Im Nutz! She is probably right
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
- LonePrairie
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A few years before I retired I started tracking every penny I spent, using Quicken. I wanted to get a handle on my expenses to make sure I could afford to stop working. I intended to do it only for a year, but found I liked it, so I kept doing it. It takes only minutes a day and I like generating reports at the end of each month.
ditto... all spending goes thru debit cards, so the end of year download takes an hour or so... update the excel and knock out some end of year slides... more just to say, 'hey, look a shiny chart' than to say "here's our budget, backwards looking, for the 9 categories of spend"TheEternalVortex wrote:I used to do this diligently, but lately I don't really keep track exactly which categories I spend in. I still keep track of overall spending though.
I've never done it, but always wanted to. I dither over what computer software to use (versus using paper). Another thing is that we only use cash--here in Japan, people don't use debit cards to pay for things. The bank does provide a nice account book that's balanced whenever you use an ATM. However, it is hard to tell where the cash goes.
We have kept detailed expenditure records for several years. At first with notebooks and for the past 10 years or so with Quicken. Having detailed spending records made it much easier to stop working and retire early. We could look back and know how much money we needed for various categories and where we could spend less if necessary. Now it makes annual budget and cash flow planning a simple process.
EO
EO
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I keep track of how much I spend on monthly and less frequent bills such as utilities, housing, insurance and taxes. But because I spend very little on credit cards and use cash for most of my day-to-day expenses, I don't keep track of what I spend my cash on (mostly food but 20% of it is for my dancing). I do keep track of ATM cash withdrawals, though.
I prepare an annual summary for myself so I can see what my overall income, spending, and saving amounts are.
I prepare an annual summary for myself so I can see what my overall income, spending, and saving amounts are.
AThiker wrote:I've never done it, but always wanted to. I dither over what computer software to use (versus using paper). Another thing is that we only use cash--here in Japan, people don't use debit cards to pay for things. The bank does provide a nice account book that's balanced whenever you use an ATM. However, it is hard to tell where the cash goes.
I pay mostly cash, here in the USA - I use Excel, and about 10 columns.
I collect receipts, and write notes as I go.
Every few days I put the info on the spreadsheet.
At first it was enlightening - "This month I spent how much??? on what??? "
Now it is habit.
ta,
mew
I have tracked the monthly spending for over thirty five years. Each month you close out by tabulating how much came in and how much went out. When I started I did this on a sheet of paper with a calculator and now I use a spreadsheet. I have always used the checkbook ledger, and I combine that with my wife's checkbook entries. The only time I need a finer detail is for very large credit card payments.
If you have no accounting system, remotely resembling double entry bookkeeping, then there is no point in worrying about investing, rate of return, risk, whatever. You have no idea where you are financially.
I started my daughter down this path when she was 14 years old. If she did not produce a spreadsheet tally at the end of the month, then there was no allowance. Now that she is in college, she supplies the same monthly tally of her expenses. Her income is supplied by me. Her spreadsheets are used to estimate a budget for each succeeding semester.
I was surprised to learn that many parents arbitrarily put money in their son's or daughter's account on a monthly basis and the money is spent within a couple of weeks; no accounting, no budget, no self control whatsoever. If you wonder why the financial world goes to hell so often I guess you can just look at how parents treat their kids when it comes to money.
Sam
If you have no accounting system, remotely resembling double entry bookkeeping, then there is no point in worrying about investing, rate of return, risk, whatever. You have no idea where you are financially.
I started my daughter down this path when she was 14 years old. If she did not produce a spreadsheet tally at the end of the month, then there was no allowance. Now that she is in college, she supplies the same monthly tally of her expenses. Her income is supplied by me. Her spreadsheets are used to estimate a budget for each succeeding semester.
I was surprised to learn that many parents arbitrarily put money in their son's or daughter's account on a monthly basis and the money is spent within a couple of weeks; no accounting, no budget, no self control whatsoever. If you wonder why the financial world goes to hell so often I guess you can just look at how parents treat their kids when it comes to money.
Sam
- ruralavalon
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We have done it both ways. In the past we estimated expenditures by simply taking income and subtracting taxes, savings etc. Now we use Quicken, starting just last year, to help get a more accurate estimate of what our retirement income needs might be.
The rough estimate proved to be fairly good.
The rough estimate proved to be fairly good.
Last edited by ruralavalon on Tue Feb 16, 2010 2:44 pm, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein |
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With retirement only 2-4 years away, I am doing it this year for the first time. Hopefully, I will have the discipline to keep it up for next year as well. I want the confidence on knowing exactly what I am spending before I hand in my notice.
In prior years, I just added up the total outgoings from my bank accounts each month. So long as the total was more or less in line with expectations, I didn't feel the need to go into more detail.
In prior years, I just added up the total outgoings from my bank accounts each month. So long as the total was more or less in line with expectations, I didn't feel the need to go into more detail.
Yeah, I just use Quicken, so it's not even like this is a burden. Actually I think it's fun, but I'm just weird.
At one point, I tried to track my cash expenditures, but at the time I was still going into the office and I had quite a few daily cash expenses. I didn't really feel it was worth the effort, so now they just go into Cash category.
At one point, I tried to track my cash expenditures, but at the time I was still going into the office and I had quite a few daily cash expenses. I didn't really feel it was worth the effort, so now they just go into Cash category.
Yeah, kinda, sorta.
I have a spreadsheet that shows the "biggies", such as mortgage, all utilities, insurance (house, car, flood, umbrella), gardener, etc.
But not daily expenditures like food, sundries, household supplies, etc.
I have lately kept a seperate spreadsheet for "Bar Expenses". No one looks at it but me, otherwise I would disguise it as "Misc. Entertainment"!
I have a spreadsheet that shows the "biggies", such as mortgage, all utilities, insurance (house, car, flood, umbrella), gardener, etc.
But not daily expenditures like food, sundries, household supplies, etc.
I have lately kept a seperate spreadsheet for "Bar Expenses". No one looks at it but me, otherwise I would disguise it as "Misc. Entertainment"!
pjstack
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Every penny for every year since 1988 or so. The first ten years were on Managing Your Money so that data is lost now. But all the data since is in Quicken.
The history of thought and culture is ... a changing pattern of great liberating ideas that inevitably turn in suffocating straightjackets... |
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We roughly track all our expenses in an excel spreadsheet, but not to the exact cents. The expenses vary from months to months, but we have a very good picture of what goes in and goes out. I even printed the summarized 12-month expenses and pasted it on the fridge so my wife and I can take a look at it almost everyday.
Three-fund portfolio |
"Simplicity is the master key to financial success." John C. Bogle
Using quicken, I have done it for several years, including all cash transactions. [Three oatmeal raisin cookies and a senior coffee at McDonald's ranges from $1.71 to $1.97, depending on which county I am in, before or after the most recent sales tax increase, and how much the store charges for the coffee (from $0.59 to $0.79).]
Okay, okay ( ), you've all convinced me to start tracking/projecting my expenses! If you can do it, so can I. Thanks everyone for providing me a sterling example. I don't mean to track every penny now, but I expect this will give me a better handle on where I'm at and what I can expect regarding achieving my goals.
I need something more interactive than a spreadsheet, but I don't want to do it all online. I'll go down and see what software is available at the local electronics store.
I need something more interactive than a spreadsheet, but I don't want to do it all online. I'll go down and see what software is available at the local electronics store.
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Yes, I did that when retiring at 62 1/2. I needed to know how much I was spending before and after, how much income was before and would be after. That prevented any surprises, except later events were a real surprise, but with that budget I always knew where I was.
Occasionally before an unusual financial event, I update the annual budget, an EXCEL spreadsheet with weekly expenses and incomes, using the current incomes and expenses. This update takes only one hour. This way I do not need to guess, but know exactly. I never used any money from my portfolio yet and live well.
Occasionally before an unusual financial event, I update the annual budget, an EXCEL spreadsheet with weekly expenses and incomes, using the current incomes and expenses. This update takes only one hour. This way I do not need to guess, but know exactly. I never used any money from my portfolio yet and live well.
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Run a google search for "YNAB". I just started using it in December and it's been great so far.AThiker wrote:Okay, okay ( ), you've all convinced me to start tracking/projecting my expenses! If you can do it, so can I. Thanks everyone for providing me a sterling example. I don't mean to track every penny now, but I expect this will give me a better handle on where I'm at and what I can expect regarding achieving my goals.
I need something more interactive than a spreadsheet, but I don't want to do it all online. I'll go down and see what software is available at the local electronics store.
It uses the zero based budget philosophy, is much more interactive than a spreadsheet, and is not online (software for mac or pc).
None of the poll choices really fit my choice. I kind of eyeball it all, but I do actually have a fairly good idea of where my money goes. 99% of my spending is on credit cards. I have a couple different ones for specific purchases. If I see an average monthly balance of 197 on credit card A, I know on average I spent roughly 200 bucks on restaurants / movies / books. If I see an average of 450 on credit card B, I know I spent on average 450 between gas, grocery stores, pharmacies. Etc Etc.
I have kept track of expenses for Jan, Apr, Jul, and Oct for a number of years on Excel. I compare the same month with what I spent in previous years and If I want to estimate an annual expense I just add up the 4 numbers for the year and multiply by three.
Keepin' it simple for 65 years...
Keepin' it simple for 65 years...
Part-Owner of Texas |
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“The CMH-the Cost Matters Hypothesis -is all that is needed to explain why indexing must and will work… Yes, it is that simple.” John C. Bogle
We improved our grocery/cleaning supplies/grooming shopping once we kept track.Allan wrote:I once tracked my expenses for a several month period, it was a real eye opener. I don't think we realize how much we spend on certain items. I would recommend everyone doing it as some point in their life.
Allan
We are all worms. But I believe that I am a glow-worm.
- White Coat Investor
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One benefit of putting all your spending on a single credit card is you can do this very easily. In fact, once a month we sit down and figure out where we spent our money. We used to call it a budget, but we don't really "budget" per say, since we spend much less than we make. We just like to see where our money is going. It can be a bit time intensive, although we have the whole process down to about an hour a month, but it does ensure we never have a major financial issue and makes sure we're on the same page about finances once a month. At this point in our marriage we've done this drill well over 100 times, so there are few surprises. We probably don't need to do it anymore, but the habit is there. Just as skinny people don't need to run, so wealthy people don't need to budget. But those skinny people didn't get skinny by sitting around on the couch eating bon-bons. And people don't get and stay wealthy by not knowing where their money is going.
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EmergDoc
We as well are blessed that we spend much less then we make. The biggest advantage for us was when we were planning our retirement we could work backwards from our spending to what our portfolio value had to be (for us with 3% withdrawal rate we could easily calculate our spending/ .03 = required portfolio value). We did this yearly until our spending could be entirely supported with a 3% or less withdrawal rate. I have actually continued to work as I enjoy my job. Any additional investment and portfolio growth increases the amount we can spend in the future.
Always appreciate your posts (and especially appreciate that I am no longer called by your esteemed colleagues )
Drum
We as well are blessed that we spend much less then we make. The biggest advantage for us was when we were planning our retirement we could work backwards from our spending to what our portfolio value had to be (for us with 3% withdrawal rate we could easily calculate our spending/ .03 = required portfolio value). We did this yearly until our spending could be entirely supported with a 3% or less withdrawal rate. I have actually continued to work as I enjoy my job. Any additional investment and portfolio growth increases the amount we can spend in the future.
Always appreciate your posts (and especially appreciate that I am no longer called by your esteemed colleagues )
Drum
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Following the recommendations in several retirement planning classes I went to, I tracked my expenditures for the 2 years preceding my retirement using Quicken [and also tried to use a credit card for everything possible so at the end of the year I would have a cross check tool from the credit card's annual report].
It worked out well and I could see that my annal outlays were lower than what my pension was going to be [my "losses" by retiring was that I was no longer continuing saving for retirement.]
It worked out well and I could see that my annal outlays were lower than what my pension was going to be [my "losses" by retiring was that I was no longer continuing saving for retirement.]