Author Topic: Tracking Spending Post-FIRE  (Read 9419 times)

arebelspy

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Tracking Spending Post-FIRE
« on: July 02, 2016, 12:47:26 AM »
Some potential sacrilege here, but did anyone else give up (or has been tempted to give up) tracking spending post-FIRE?

I don't mean giving up knowing how much you've spent, because you'll easily be able to calculate how much you spent by how much you deposited into your account (either via rents, pension, social security, dividends, or plain 'ol selling stocks and transferring the money from your brokerage).  But I mean tracking it so you know how much you spent on each item/category.

Basically.. If you're happy with everything you spend on, and you pull out 4% (or whatever number makes you comfortable), and still have money left at the end, does it matter exactly how much went into what categories?

Hypothetical example: If you have 1MM and are comfortable with a 4% WR, and your bank account starts at 20k (cause that's your comfortable cash cushion), and you withdraw 10k/quarter (for 40k/yr, or 4%), and your bank account ends with 25k, you clearly spend 35k (4x 10 withdrawals - 5k extra in bank = 35k spent).  That's a 3.5% WR, and lower than your targeted 4%.  So does it matter exactly how much of that went to gas, or to food, or to clothes, or whatever?

Sure, knowing it means you could optimize some, or cut fat, or whatever, but if you're happy with it.. does it matter?

Given the above, has anyone basically stopped tracking exact spending in FIRE?  Or does the idea tempt you?

I'm sure some of you LIKE tracking where it goes.  And I used to, too.  But now... I'm not sure I care.  :)

Thoughts?
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Re: Tracking Spending Post-FIRE
« Reply #1 on: July 02, 2016, 01:10:44 AM »
I still track. I still find it's useful for the same reasons it would be useful before FIRE: where is my money going? If I want a new "X", can I afford it?  Will traveling to "Y" take me over my withdrawal rate? What if I buy X and travel to Y and a friend has tickets to Z? I would have a hard time saying no, which is fine in the short term but could cause problems long term.  It's nice to know how much of my withdrawals I should be able to re-invest as well, instead of leaving too much cash sitting around growing moldy.

For me, the 1/2 hour spent a month totaling up receipts is worth it. I can only see the appeal if I didn't literally have the opportunity for more amazing experiences month than I could afford (at an indefinite pace, anyway). Since I do, I curtail my spending to a reasonable percent of my net worth, which I know because I track.
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Re: Tracking Spending Post-FIRE
« Reply #2 on: July 02, 2016, 02:08:32 AM »
I track what I'm spending but not what I spent it on - same as before FIRE. I want to know if I get seriously off target.



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Re: Tracking Spending Post-FIRE
« Reply #3 on: July 02, 2016, 10:32:17 AM »
I track for two reasons:
  • so I can make trade-offs if a travel opportunity comes up
  • my husband is a bit of a spendypants, still, so I need to watch that he doesn't pull us off track. It helps when I can show him how his choices add up over a month

I use Mint, and since I check things regularly to make sure no fraudulent charges show up, it doesn't take much longer to quickly categorize things t check against our budget. Mint gets 90% of them right automatically.

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Re: Tracking Spending Post-FIRE
« Reply #4 on: July 02, 2016, 10:58:39 AM »
Still track down to the penny.  I like to know where I stand at any moment.

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Re: Tracking Spending Post-FIRE
« Reply #5 on: July 02, 2016, 11:10:30 AM »
I'm not FIRE'd yet, but I already stopped tracking my spending details years ago and I don't have a budget (gasp!).  I can tell you exactly what my monthly spending has been since Dec '10 (when I started my current spreadsheet), but I can't tell you how much of that was food, clothing, utilities, etc.

I used Mint for a few months, but I stopped since it was a pain trying to make everything correct.  When I go to Costco and buy food, a pair of jeans, and new air filters, I really don't want to bother with splitting that receipt into three categories.

I'm happy with my spending level, so no, the nitty-gritty details don't matter to me.

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Re: Tracking Spending Post-FIRE
« Reply #6 on: July 02, 2016, 11:14:57 AM »
Wait, what?  If you don't track your spending; what do you do for fun on a Friday night?  😉
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Re: Tracking Spending Post-FIRE
« Reply #7 on: July 02, 2016, 11:45:24 AM »
I am still tracking, but I am only one year into FIRE (today is my FIRE anniversary!). I only tracked for about a year or so before FIRE (since I was under the illusion that I would work until 65yo).
I track to get more data. There have been some unexpected expenses thus year (maintenance, vet, etc.) - so it is good to get more information.

But I can see backing off the details once observed equals essentially expected spend over time. You've been tracking and olanning for a long time - you likely have enough data points! If there are any big changes - you can go back to tracking.

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Re: Tracking Spending Post-FIRE
« Reply #8 on: July 02, 2016, 04:34:29 PM »
I'm still tracking/graphing everything.  I've added a few graphs to try to compare FIRE spending over time.

I don't foresee myself getting less detailed.  It probably doesn't matter... but it's sort of an OCD habit that I don't see myself breaking.

Like G-dog... I'm just crossing the 1 year threshold, so I am still in a bit of a paranoid state.  But I am pleasantly surprised that even with some ridiculous unexpected expenses (month and a half in a hotel away from home, paying a niece's college tuition, ...)  ... even with all that, I am still 20% below my "target" spending. 
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Re: Tracking Spending Post-FIRE
« Reply #9 on: July 02, 2016, 04:40:58 PM »
I'm tempted to stop.  My current tracking isn't as meaningful as it used to be, because I'm not including DH's daily expenses in China -- I still include the major things like the mortgage payment, DD's school fees, and the monthly payment to our helper, but not groceries and other everyday stuff.  He does give me his receipts when we are together, but I've just been too lazy to back enter them.

I probably will continue to track US spending for at least a year after we sell the apartment, because I do want some kind of record of what it costs us to live the kind of lifestyle that makes everybody happy. Most concerned about keeping things like groceries and restaurant spending in check, and ensuring our withdrawal rate isn't excessive. 

OK, should probably go update my expense sheet now - I guess the fact that my current pattern is to avoid it is telling me it has probably outlived its usefulness. 
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Re: Tracking Spending Post-FIRE
« Reply #10 on: July 02, 2016, 05:33:05 PM »
I don't track now and I'm not FIRE'd. I can't see myself tracking when I FIRE.

All I do is track income & savings. The difference will be spending. I just can't be bothered tracking spending at a detailed level. I have estimated expenses now and in retirement but it's just an estimate.

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Re: Tracking Spending Post-FIRE
« Reply #11 on: July 02, 2016, 09:17:30 PM »
Yep, fired 1.5 years ago, only keep track of total spending, no itemizing for me.... too lazy now ;)  Just have to stay w/in my swr.

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Re: Tracking Spending Post-FIRE
« Reply #12 on: July 03, 2016, 09:37:54 AM »
I've stopped tracking my spending since I "retired." It is very modest in most categories, and there's very little else to cut that wouldn't impact quality of life. I found it made me quite tense about money.

I would track a category of spending if I needed to, but not every last cent.

I do track income carefully, though, because it is coming from five or six different sources, and some of it has turned out to be quite variable. (Usually for the better.) I need to track it to know how much tax to pay. I'd also need the numbers to know how much I would need to withdraw from investments, if income didn't exceed spending or for a planned purchase.

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Re: Tracking Spending Post-FIRE
« Reply #13 on: July 03, 2016, 09:40:20 AM »
Count me a heretic.  I don't track categories.  Actually, I NEVER have.  I'm a believer in the un-budget approach.  Give yourself an allowance and stick to it.  Otherwise, buy any damn thing you please.
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BTDretire

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Re: Tracking Spending Post-FIRE
« Reply #14 on: July 03, 2016, 09:42:35 AM »
I'm retiring at the end of the year, my wife isn't.
We have never had a budget, just live frugaly.
I don't track spending, I just keep track of financial net worth,
Investable assets only.
 I don't know what I will do re: yearly spending.
Over the next five years I hope to just break even.
My wife is going to continue working to pay for my daughters dental school tuition.
That $45k used to go into savings, so I doubt we will have any savings,
other than our growth in the stock market. 
If my wife ever retires, my thought would be to transfer about $12.5k
in to the checking account every quarter, if we spend it all, OK, if it doesn't last
we are spending the kids inheritance and that's not all bad. :-)
 In 5 more years I'll probably start collecting SS, so maybe the $12.5k a quarter is more than we'll need.

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Re: Tracking Spending Post-FIRE
« Reply #15 on: July 04, 2016, 07:09:17 AM »
I'm planning to retire before my wife and have been estimating monthly/yearly spending since about a year ago. Now that I'm roughly two years from FIRE, I'm starting in on Nords' pre-FIRE checklist (thank you, Nords and everyone else who contributed to that list), part of which is living on my expected retirement income for a year in order to really battle test it, or in this case carefully tracking every dollar spent to make sure it comes in at or under my previous estimates. Like some of you mentioned, I can just as easily look at my net takehome pay vs. what I save each year and that should pretty much be the same, but I want to be certain. So I'll tally every dollar spent each month over the next year and make sure that it all checks out. It's kind of a good exercise anyway since it makes me that much more aware of what I choose to spend beyond normal obligations.

However, I don't plan to track spending as closely as this after I hang it up at work. At that point I'll go back to the simpler formula of 'income - expenses = don't spend more than this, dummy'.

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Re: Tracking Spending Post-FIRE
« Reply #16 on: July 04, 2016, 09:22:23 AM »
Not FIRE'd yet but I do not track individual budgets, only total monthly spend.
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arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #17 on: July 08, 2016, 12:49:24 AM »
This way very helpful.

Thanks everyone for the thoughts.  :)
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Re: Tracking Spending Post-FIRE
« Reply #18 on: July 08, 2016, 07:12:27 AM »
OMG, my dirty Mustachian secret: we don't track. Well, we look at categories over time sometimes. We pick items to remove (let subscriptions expire, rethink dog care, choose not to buy something), but we aren't spreadsheeters. That is, we see the expenses, but on a macro level. But we aren't on the edge and our plan is automated, so it works.

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Re: Tracking Spending Post-FIRE
« Reply #19 on: July 08, 2016, 02:41:50 PM »
We're not quite FIRE, but we plan to track at least somewhat to see general trends. For example, if health insurance or property tax increases by a huge amount, will we increase our annual spending or decrease our spending in other categories. If we choose the latter, tracking helps us see where we have fat to trim.
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Re: Tracking Spending Post-FIRE
« Reply #20 on: July 09, 2016, 11:59:56 AM »
I'm planning to retire before my wife and have been estimating monthly/yearly spending since about a year ago. Now that I'm roughly two years from FIRE, I'm starting in on Nords' pre-FIRE checklist (thank you, Nords and everyone else who contributed to that list)...
You're welcome-- glad it's helping!

Some potential sacrilege here, but did anyone else give up (or has been tempted to give up) tracking spending post-FIRE?

I don't mean giving up knowing how much you've spent, because you'll easily be able to calculate how much you spent by how much you deposited into your account (either via rents, pension, social security, dividends, or plain 'ol selling stocks and transferring the money from your brokerage).  But I mean tracking it so you know how much you spent on each item/category.

Basically.. If you're happy with everything you spend on, and you pull out 4% (or whatever number makes you comfortable), and still have money left at the end, does it matter exactly how much went into what categories?

Hypothetical example: If you have 1MM and are comfortable with a 4% WR, and your bank account starts at 20k (cause that's your comfortable cash cushion), and you withdraw 10k/quarter (for 40k/yr, or 4%), and your bank account ends with 25k, you clearly spend 35k (4x 10 withdrawals - 5k extra in bank = 35k spent).  That's a 3.5% WR, and lower than your targeted 4%.  So does it matter exactly how much of that went to gas, or to food, or to clothes, or whatever?

Sure, knowing it means you could optimize some, or cut fat, or whatever, but if you're happy with it.. does it matter?

Given the above, has anyone basically stopped tracking exact spending in FIRE?  Or does the idea tempt you?

I'm sure some of you LIKE tracking where it goes.  And I used to, too.  But now... I'm not sure I care.  :)

Thoughts?
You're reading my mind.  We should have done a breakout session on this at Camp Mustache.

We have over 154,000 transactions in a Quicken database that stretches back to 1992 (yes, 24 years ago).  I tracked obsessively during our working years. ("Honey, could you check under the couch?  I just did the monthly spending report and I think we dropped a dime.") I also tracked everything during the last 13 years, although in the last few years it might take me 6-8 months to get around to reconciling IRA account balances against the dividend distributions.

Last year we were on travel for five months.  The Mac/iOS version of Quicken really sucks, and I did not enjoy coming home to enter 2-3 months of transactions on a PC. 

So now I only log our rental property transactions (the ones we enter on Schedule E) and large purchases (which might merit a sales-tax deduction).  I don't print out monthly expense reports or annual budgets, and I only run annual reports every 2-3 years. 

As a compromise ("just in case"), I've linked all of our accounts to Personal Capital.  It has its flaws, but I'm hoping that it'll be able to spit out an annual total of our expenses.  We do almost all of our spending on our credit cards or checking-account deductions, and PC should be able to keep up with that. 

I still keep a spreadsheet that tracks our annual income (dividends, interest, cap gains) and our taxes.  But that's mainly from reading books like "Millionaire Next Door" and "Your Money Or Your Life" and seeing how the numbers change over the decades. 

The answer to your question is that I agree with you-- I no longer see a need to track our spending.  I just want to know the annual number for blogging purposes, but I'm not going to be writing detailed expense summaries or net-worth reports. 
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StartingEarly

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Re: Tracking Spending Post-FIRE
« Reply #21 on: July 09, 2016, 01:22:45 PM »
I don't track my spending at all and I am nowhere close to RE. If I can justify a purchase I purchase it, if I can't I don't, why would I bother looking at what I spent after the fact unless I was having problems with my spending?

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Re: Tracking Spending Post-FIRE
« Reply #22 on: July 09, 2016, 05:01:58 PM »
I've never tracked spending. When you're as naturally frugal (cheap?) as I am you don't need to.

Every 6 months I add up all my assets and subtract any liabilities.

So far my net worth's been higher every time except for a tiny blip in 2008 and 2011. I figure I must be doing something right.

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Re: Tracking Spending Post-FIRE
« Reply #23 on: July 09, 2016, 06:34:51 PM »
Were 15 months in on being fire'd and though a pain we still do it because we still have work to do imho. We are not by any means OCD about it but categorize everything though some are pretty big baskets per sae. I have made better steps in hardly checking my investments. Use to be daily and now unless i hear something by accident in the news or? i hardly check my investments.
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Re: Tracking Spending Post-FIRE
« Reply #24 on: July 09, 2016, 10:50:58 PM »
I tracked my finances (via Quicken) against a budget before FIRE and still do after, although I don't really need to as I spend much less than comes in each year. I do so primarily because I really enjoy measuring things against predictions (you should see the electricity/gas/weather prediction/monitoring system I have set up in my house!).

I am also a bit of a pessimist and will not be surprised if there is some major upset to our current economic way of life in my potential 40+ year FIRE time that challenges, and even throws, existing FIRE worthy assumptions (eg. 4% SWR) out the window, so I want to have contingencies in place. For example, I am channeling my current underspend into capital home projects that will serve to reduce household running costs well into the future and therefore improve my FIRE survivability in the event of such a shock being realised. While I could still do some of this without tracking the specifics of my spending, I still like to see that the expected running cost reductions are being realised. Value for money is still important for me in FIRE, so I still track.

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Re: Tracking Spending Post-FIRE
« Reply #25 on: July 12, 2016, 12:07:34 PM »
I don't track my spending at all and I am nowhere close to RE. If I can justify a purchase I purchase it, if I can't I don't, why would I bother looking at what I spent after the fact unless I was having problems with my spending?

Kind of where I am at. I have a loose budget with fixed expenses and an allowance for other, then auto-debit the rest to savings. I stay aware of each purchase so I know when something is unnecessary and that always goes into my choice of whether to spend money on it or not.

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Re: Tracking Spending Post-FIRE
« Reply #26 on: July 13, 2016, 07:41:13 AM »
Nope, nope, nope. Not since December 5, 2012. After so many years of laser sharp focus, frugality is our natural default. In fact, the only place we really feel lifestyle creep is in the area of charitable giving, which feels damn good.
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Re: Tracking Spending Post-FIRE
« Reply #27 on: July 13, 2016, 10:34:39 PM »
We tracked for a full year and a half into FIRE. Then I stopped. That was December 31, 2015.

Now, I review the cc statement, and monitor the net worth. Other than that - we're like many others here - we rely on frugal(ish) habits, and spending $ on things we value.

One adjustment: I added a liability line in mint that offsets sporadic and nutty zillow housing increase estimates, mainly so it doesn't give me a false sense of security. As the house value increases, I nudge the offset up.
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Re: Tracking Spending Post-FIRE
« Reply #28 on: July 13, 2016, 11:42:37 PM »
Nope, we don't. We are pretty dialled in right now on our average spending and know what our preferred lifestyle costs us...and considering our dividend income is comfortably above our spending...AND my wife is still working a very nice career, there is really no need to track in any great detail - we are not stashin' like we were when we both worked, but it's still piling up nicely. Dividends are mostly reinvested automatically, so the investment income keeps churning higher...everything is on cruise control. Not really having to worry about money-things is a true gift.

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Re: Tracking Spending Post-FIRE
« Reply #29 on: July 14, 2016, 09:07:27 AM »
I don't budget but I do track simply - my bank categorizes and a download each month into excel.  It takes about 5 minutes.  I just like seeing where it all goes, I don't really use it for anything other than viewing where my flex is in my spending that could be cut/reduced in times of need.   Generally the total spending stays about the same each twelve month period but the mix might change year to year somewhat.

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Re: Tracking Spending Post-FIRE
« Reply #30 on: July 14, 2016, 09:29:07 AM »
For most of my working life, I did not carefully track spending.  I just knew I was living below my means, but did not know exactly how much I spent or what I spent it on.  I started carefully tracking spending in the year before FIRE to make sure the numbers made sense.  I knew that my income and spending would be very different in FIRE.  I have continued to track my expenses in the first 18 months of FIRE.  Once I am convinced I have a good baseline of my expenses, including taxes, home maintenance, travel, etc. I expect that I will either stop tracking altogether or just check top-level numbers once or twice a year.

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Re: Tracking Spending Post-FIRE
« Reply #31 on: July 14, 2016, 09:38:30 AM »
For most of my working life, I did not carefully track spending.  I just knew I was living below my means, but did not know exactly how much I spent or what I spent it on.  I started carefully tracking spending in the year before FIRE to make sure the numbers made sense.  I knew that my income and spending would be very different in FIRE.  I have continued to track my expenses in the first 18 months of FIRE.  Once I am convinced I have a good baseline of my expenses, including taxes, home maintenance, travel, etc. I expect that I will either stop tracking altogether or just check top-level numbers once or twice a year.
This is essentially my situation - I am 12 months into FIRE, so getting a new baseline. I a, admittedly lax in collecting the data now though - the end goal doesn't feel as urgent 😎

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Re: Tracking Spending Post-FIRE
« Reply #32 on: July 15, 2016, 08:48:35 AM »
A big reason for my tracking is to know what I'm spending my money on. Make sure I catch any surcharges, fees, fraudulent charges and so on. I do leave all my credit cards on autopay though just so I can have the option of not tracking and I don't get hit with interest. Not post fire though, so maybe that'll change when I slow down the on fight to freedom.

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Re: Tracking Spending Post-FIRE
« Reply #33 on: July 30, 2016, 02:47:05 PM »
I haven't tracked any spending since FIRE with the exception of a rough estimate of travel expenses on our 5 week road trip.  At one time my credit card statement served as a pretty good quick glance tracking device but when I started churning, that went out the window.  If anything, not tracking probably makes me more conservative than I need to be. I don't really want to track, but figure I can use my monthly withdrawls to monitor my spending.

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Re: Tracking Spending Post-FIRE
« Reply #34 on: August 01, 2016, 07:50:24 AM »
I feel so much better reading this, especially from you, Arebelspy, and then seeing all the posts.  A year in and I am still tracking but I'm much more lackadaisical about it.  I've really only done it to see how close we are to keeping within our pension.  I still have everything budgeted but if we go over budget on something, it's not too big a deal.  I don't feel we've been very mustachian as far as that goes but then I don't think we need to be.

I actually have our budgeted projected out for the next 11 years...by that time we'll have access to our 401K and SS and from it, I can see that we'll have way more money than we'll know what to do with.  Now that we're retired, we have no debt and we have only 5 direct debits from our checking account each month - our COA, our electric bill, our life insurance, our credit card (we buy groceries and everything else with that) and the cash we take out for play money.  So it's only the credit card amount that changes each month and it tends to only fluctuate by a couple hundred dollars any given month.  So I don't worry about tracking like I did when I was paying things off and saving up but I'll probably keep doing what I'm doing just to have the knowledge in the back of my head.
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Re: Tracking Spending Post-FIRE
« Reply #35 on: September 02, 2016, 07:56:46 PM »
Many people track spending to keep it down.  But for the truly frugal, consider having a budget to keep spending up.  Some time ago I realized I really like music and get a lot of enjoyment out of any songs I buy online.  But left to my own frugal nature, I didn't tend to buy much music.  So I switched that around, and tracked spending - by creating a "spend this amount" budget.  The goal isn't getting spending under that amount, it's reaching that amount of spending.

For people who are savers by nature, it's nice only making the decision once.  The guilt of spending is easier to take once, when setting up a budget, than dealing with on every purchase.  Especially if it's something you really like, but are struggling to spend money for it.

arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #36 on: September 03, 2016, 01:00:36 AM »
Many people track spending to keep it down.  But for the truly frugal, consider having a budget to keep spending up.  Some time ago I realized I really like music and get a lot of enjoyment out of any songs I buy online.  But left to my own frugal nature, I didn't tend to buy much music.  So I switched that around, and tracked spending - by creating a "spend this amount" budget.  The goal isn't getting spending under that amount, it's reaching that amount of spending.

For people who are savers by nature, it's nice only making the decision once.  The guilt of spending is easier to take once, when setting up a budget, than dealing with on every purchase.  Especially if it's something you really like, but are struggling to spend money for it.

Yup, we've done the same thing, trying to set up a target number to purposefully spend more in certain areas that we find we value, but may not spend on.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
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Re: Tracking Spending Post-FIRE
« Reply #37 on: September 13, 2016, 09:42:52 AM »
Many people track spending to keep it down.  But for the truly frugal, consider having a budget to keep spending up.  Some time ago I realized I really like music and get a lot of enjoyment out of any songs I buy online.  But left to my own frugal nature, I didn't tend to buy much music.  So I switched that around, and tracked spending - by creating a "spend this amount" budget.  The goal isn't getting spending under that amount, it's reaching that amount of spending.

For people who are savers by nature, it's nice only making the decision once.  The guilt of spending is easier to take once, when setting up a budget, than dealing with on every purchase.  Especially if it's something you really like, but are struggling to spend money for it.

So you're happier spending MORE money than your normally would?
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arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #38 on: September 13, 2016, 03:46:58 PM »
Many people track spending to keep it down.  But for the truly frugal, consider having a budget to keep spending up.  Some time ago I realized I really like music and get a lot of enjoyment out of any songs I buy online.  But left to my own frugal nature, I didn't tend to buy much music.  So I switched that around, and tracked spending - by creating a "spend this amount" budget.  The goal isn't getting spending under that amount, it's reaching that amount of spending.

For people who are savers by nature, it's nice only making the decision once.  The guilt of spending is easier to take once, when setting up a budget, than dealing with on every purchase.  Especially if it's something you really like, but are struggling to spend money for it.

So you're happier spending MORE money than your normally would?

Yes.  Sometimes you realize there's activities we enjoy that are worth spending on, even if our natural inclination is to decline them.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
You can also read my forum "Journal."

Cassie

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Re: Tracking Spending Post-FIRE
« Reply #39 on: September 13, 2016, 11:20:22 PM »
We don't track every thing but know how much we spend monthly, etc. I don't need any encouragement to keep my spending up on the things I value:))

markus

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Re: Tracking Spending Post-FIRE
« Reply #40 on: September 18, 2016, 01:18:50 PM »
Just a quick (nearly) three month update since I started tracking my own spending dollar for dollar: I'm very glad I decided to do this. So far, my numbers have been coming in within my initial estimates, but only barely. As I've gone along, I've found little purchases here and there that I hadn't accounted for. I think it takes time to really shake out all of the smaller purchases and recurring annual charges, so this has been an exercise well worth doing.

It takes some diligence to really keep up with as well. My wife and I often shop at a farmers market where we're both paying for everything in cash, so we need to both keep track of exactly how much we've spent. I then take those numbers and put them into a spreadsheet so I can make sure we're dividing up our monthly expenses fairly (according to our respective incomes), and finally entering my own groceries expenses into my own tracking spreadsheet. Point being, when paying for some things in cash, some things with our separate credit cards and other things like restaurants together on just one of our cards, it would be easy to forget to account for a purchase here or there.

It's become a thing I enjoy doing, though, stopping to enter in my portion of the latest receipts and watching the numbers stack up. Even after another month or two of this, I'd feel comfortable extrapolating my expenses out across the year, but I'll go ahead and keep this up for the full one year term. There have been a few small surprises so far, so there are bound to be a few more.

The other big benefit of doing this is that it makes me that much more aware of when I choose to spend money, particularly on small things like coffee or a snack when I'm out around the city. At the same time, I can understand how one could take this too far and never stop to enjoy a little something special, or to stop and just sit with a really good coffee with your companion. I've also had to add certain categories to my spreadsheet like 'music' as a reminder that I should do some record shopping once in a while, go see a show or whatever. That's always been a big part of my life, and it would be easy to tighten the belt a bit too much when breaking everything down in a table.

The most important benefit is the confidence in knowing precisely what I'm spending. Even though I don't plan on continuing this beyond one full year, I'm glad that I'm going to the trouble of doing it, and I'd recommend it to others.

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Re: Tracking Spending Post-FIRE
« Reply #41 on: October 03, 2016, 10:40:15 AM »
Many people track spending to keep it down.  But for the truly frugal, consider having a budget to keep spending up. 
For people who are savers by nature, it's nice only making the decision once. 

Ha! I thought I was the only one who budgeted to try to spend more! Not in general, but I am trying to get myself to spend more money on "fun" things, rather than just skipping any activity that costs any money.

I travel full-time, so I track my housing expenses to the penny, mostly out of curiosity. Other than that I just have a couple of "free money" categories to try to get myself to do things more.

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Re: Tracking Spending Post-FIRE
« Reply #42 on: October 20, 2016, 05:25:10 PM »
We really don't "track" spending, but our Financial Planner tells us we spend about $13K/month.  This is still leaving us quite a bit of extra money (pension, deferred compensation) that we just send back to Schwaab.  Spouse hasn't started taking SS yet - turning 65 next year.  Probably wait until 70.

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Re: Tracking Spending Post-FIRE
« Reply #43 on: October 21, 2016, 01:09:28 PM »
We are 64 & 65 years old......ready to pull the plug on our 9 to 5 jobs.  A meeting just this week with our Financial Planner had the same theme as a few of the rest of you:  'You have been such good savers, that you will probable have to "learn" how to spend some of your accumulation.'   Strange hearing that. 

My husband told him that at our first grocery shopping trip after we both retire, he can picture me walking into the store and then back out empty handed because I'll think I can't afford anything without having a paycheck.   (could happen)

But we are counting the days!

Metric Mouse

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Re: Tracking Spending Post-FIRE
« Reply #44 on: October 21, 2016, 07:17:26 PM »
My husband told him that at our first grocery shopping trip after we both retire, he can picture me walking into the store and then back out empty handed because I'll think I can't afford anything without having a paycheck.   (could happen)


I've totally had that feeling!  Don't worry - I'm of the opinion that people who think like that will not have to worry about having a successful retirements - precisely because they think like that.  Congrats to being so close to being able to enjoy the fruits of your careers!
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Re: Tracking Spending Post-FIRE
« Reply #45 on: October 27, 2016, 05:07:26 AM »
We tracked our spending intricately for exactly 12 months a couple years ago - once it was clear the monthly/quarterly spending was surprisingly consistent, I saw no reason to continue spending the time to track everything. After all, as mentioned in the original post, if our accounts are staying flat or rising, it essentially means we've stayed within budget - and this is how I look at it now.

As long as our assets keep rising were doing fine, and will continue spending money on whatever we view as proving us commensurate value/happiness/enjoyment for the price.

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Re: Tracking Spending Post-FIRE
« Reply #46 on: July 03, 2017, 08:09:57 AM »
Just a quick (nearly) three month update since I started tracking my own spending dollar for dollar: I'm very glad I decided to do this. So far, my numbers have been coming in within my initial estimates, but only barely. As I've gone along, I've found little purchases here and there that I hadn't accounted for. I think it takes time to really shake out all of the smaller purchases and recurring annual charges, so this has been an exercise well worth doing.

It takes some diligence to really keep up with as well. My wife and I often shop at a farmers market where we're both paying for everything in cash, so we need to both keep track of exactly how much we've spent. I then take those numbers and put them into a spreadsheet so I can make sure we're dividing up our monthly expenses fairly (according to our respective incomes), and finally entering my own groceries expenses into my own tracking spreadsheet. Point being, when paying for some things in cash, some things with our separate credit cards and other things like restaurants together on just one of our cards, it would be easy to forget to account for a purchase here or there.

It's become a thing I enjoy doing, though, stopping to enter in my portion of the latest receipts and watching the numbers stack up. Even after another month or two of this, I'd feel comfortable extrapolating my expenses out across the year, but I'll go ahead and keep this up for the full one year term. There have been a few small surprises so far, so there are bound to be a few more.

The other big benefit of doing this is that it makes me that much more aware of when I choose to spend money, particularly on small things like coffee or a snack when I'm out around the city. At the same time, I can understand how one could take this too far and never stop to enjoy a little something special, or to stop and just sit with a really good coffee with your companion. I've also had to add certain categories to my spreadsheet like 'music' as a reminder that I should do some record shopping once in a while, go see a show or whatever. That's always been a big part of my life, and it would be easy to tighten the belt a bit too much when breaking everything down in a table.

The most important benefit is the confidence in knowing precisely what I'm spending. Even though I don't plan on continuing this beyond one full year, I'm glad that I'm going to the trouble of doing it, and I'd recommend it to others.

I'm reporting back in after having just completed a full one-year accounting of all my expenses. As I mentioned in this earlier post above, I'm glad I decided to go through the trouble to do this. The most notable piece of information is that my earlier estimate (extrapolated from credit card records and bills, and then a lot of gut feeling for general cash spending, travel and trips, etc.) was significantly off. My actual spending over the course of a year was a full 25% higher than the estimate. The culprits lay in holiday/travel spending, Christmas or other gift buying, and then a lot of smaller purchases across the year which I almost always just pay for in cash: coffee here, tea there, beer or cocktails, an appetizer there, so on and so forth. My wife and I are actually reasonably frugal about that kind of stuff, but it still all does add up and was difficult to account for in the first estimate.

Now I've got a real and trustworthy number to work from which feels really good, plus it's a significant item in the "pre-FIRE checklist" to cross off. I can now easily break all of my expenses down into their basic categories and go on to make pre/post-FIRE estimates (e.g. work-related expenses such as commuting costs going down, trips and travel probably going up), as well as getting a look at what I'd consider bare-bones spending in the case of serious market turmoil.

Again, I'd recommend anyone to do a thorough tracking of every penny spent like this, at least just for a few months. It really has made me much more cognizant of smaller purchases here and there and helped bring me closer to an even more mustachian mindset. The funny thing was due to tracking each little expense carefully like this, I'd often want to just skip something that I was thinking of buying ... something small like coffee or lunch out with the wife or an album by some new band, or even larger things like a short weekend trip in a nearby city ... because I didn't want to see the total numbers in my expense tracking sheet tick upward. But then I had to remind myself that this is supposed to be an accounting of what I actually spend day-to-day with no changes, no adjustments: simply what does it cost me to live just as I am, not holding back from anything? So that was a good exercise in itself, because I felt like there were a lot of expenses here and there that I could easily go without, and I wouldn't feel any less happy.

Most of the time I just used a simple note-taking app in my phone to keep track of everything. Sometimes, such as on an overseas trip, that list became very long and would involve multiple currencies, so I had to be very thorough upon returning home to get it all entered, factor in the exchange rates I would have paid at the time, any additional foreign transaction fees that might not appear until later, maybe an ATM fee, etc, etc, etc. Again, it's all of those little things or delayed expenses that are very easy to lose sight of or shrug off, and I wanted each and every one of them.

I ended up entering everything into an Excel spreadsheet, and in the first couple of months kept finding new classes of expenses that I really wanted to track as their own separate item (e.g. how much do I spend on just coffee and tea, so I separated that out from normal grocery expenses). It's obviously not totally necessary to get that granular, but it's illuminating to see that data as part of the final pie chart.

And there you have it, a one-year test finally complete, and well worth doing in my opinion. It's actually a little difficult to not keep right on tracking into this next month, but I would only do a penny-for-penny tracking like this again after actually FIRE'ing, just to see how the ratios might change. No doubt there will be some surprises in either direction.

arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #47 on: July 03, 2017, 10:44:10 AM »
Tracking at some point is definitely useful. This thread questions if it's necessary to do forever.

I haven't tracked the last few years since FIRE.  Mint's chugging away, but I haven't gone in to recategorize stuff, or look at spending, in a long time.

Money keeps piling up faster than we're spending it.  Beyond that, I couldn't tell you.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with a kid.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (occasionally) blog at AdventuringAlong.com.
You can also read my forum "Journal."

markus

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Re: Tracking Spending Post-FIRE
« Reply #48 on: July 03, 2017, 02:49:40 PM »
Oh, for certain. I don't plan to track penny for penny like this forever. Having a full year's worth of data like this is more than enough. I figure if my spending were to really tick up after this, I'd definitely notice it.

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Re: Tracking Spending Post-FIRE
« Reply #49 on: July 03, 2017, 02:55:04 PM »
I track pretty carefully because I'm taking advantage of the ACA's subsidy and the silver level cost sharing, and staying under a certain dollar amount is VERY important in order to keep from owing, and for the purposes of making sure I can get the cost sharing perk the following year.

But if we weren't interested in the insurance angle, I'd probably be much less involved in budgeting/tracking expenses.
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