Author Topic: Tracking Spending Post-FIRE  (Read 13915 times)

Spork

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Re: Tracking Spending Post-FIRE
« Reply #50 on: July 03, 2017, 03:03:54 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.

We do this as well.

In addition, we have come to the realization that we over saved.  Tracking gives us the ability to look at expenses and turn a few expenditures up.  After 20+ years of watching/delaying spending, it is a little difficult to do.  It's a huge mindset shift.
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arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #51 on: July 03, 2017, 11:42:13 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.

But you just need to plan income for that, not expenses.
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Frankies Girl

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Re: Tracking Spending Post-FIRE
« Reply #52 on: July 04, 2017, 12:35:25 AM »
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.

But you just need to plan income for that, not expenses.

In my case, I am having to take RMDs on some accounts, and we also take out more throughout the year (dividends and cap gains usually) from our portfolio to support the spending (at least during the good times the money comes from the portfolio). I have to be aware of what money is in play during the year from dividends/cap gains and RMDs, and how much I'll need to generate out of the portfolio if they don't cover all our yearly expenses.

We're not perfect at staying on budget, so for us it does require keeping an eye on a monthly budget and then making sure we stick to it as best we can so we don't end up having to pull out more from our portfolio, thus bumping us up over our projected income as reported for the ACA. It wouldn't take much to knock us up into a higher bracket as far as the subsidies and to a lesser extent, cost sharing go. Since there is no claw back on cost sharing it may not be as much of a concern as the subsidy limits, but we have no idea if they block you from estimating your income low enough to continue to receive the cost sharing benefits if you have consistently blown past the estimates each year.

We're also in the early part of FIRE, so I feel like it is still a smart move to track our spending for a while to see where we are strong and weak on budgeting/spending and work out the patterns.
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Vegasgirl

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Re: Tracking Spending Post-FIRE
« Reply #53 on: July 05, 2017, 08:36:53 AM »
I'm not FIRE but I've never tracked spending.  I have a savings goal each month (pay myself first) and once that is achieved I'm good.  I do have a spreadsheet and I spot check the big ticket items to make sure actuals are close to what I'm estimating but that's about it.

arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #54 on: July 05, 2017, 08:50:11 AM »
I'm not FIRE but I've never tracked spending.  I have a savings goal each month (pay myself first) and once that is achieved I'm good.  I do have a spreadsheet and I spot check the big ticket items to make sure actuals are close to what I'm estimating but that's about it.

I'd definitely recommend you track, for at least awhile, pre-FIRE. Coming up with a FIRE budget is very useful. Seeing how you spend money is nice.

Also paying yourself last gets you to FIRE much quicker.
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Spork

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Re: Tracking Spending Post-FIRE
« Reply #55 on: July 05, 2017, 08:57:07 AM »
I'm not FIRE but I've never tracked spending.  I have a savings goal each month (pay myself first) and once that is achieved I'm good.  I do have a spreadsheet and I spot check the big ticket items to make sure actuals are close to what I'm estimating but that's about it.

I'd definitely recommend you track, for at least awhile, pre-FIRE. Coming up with a FIRE budget is very useful. Seeing how you spend money is nice.

Also paying yourself last gets you to FIRE much quicker.

Yeah, it turns out that when you look at annual expenses, sometimes the "big ticket item" is a bunch of repeating small ticket items.  For instance, one of the things MMM made me self analyze was my fuel use (pre-FIRE, when I was commuting every day).  The apparently small weekly cost of gas was more than it cost me to sell my SUV and buy a more fuel efficient car.  Auto expenses used to be about my #2 expense.  Now it's down to about #8.
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Daisy

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Re: Tracking Spending Post-FIRE
« Reply #56 on: July 05, 2017, 06:07:18 PM »
I never tracked spending before seriously planning for FIRE. But about 5 years ago I started to track it all in my own custom made spreadsheet. It helped me find some obvious overspending categories.

After trimming down those areas, tracking spending keeps me in check and like others have said, allows me to spend more in  some areas where I might be afraid to but get a lot of life enjoyment from...entertainment and eating out with friends. As long as I am within boundaries, I am good. But if I didn't track it, I'd go into full freakout frugal mode thinking I shouldn't spend money on it.

I think I will continue post FIRE so I can feel comfortable spending in categories that bring me joy.

I have the spreadsheet in Google docs now so I can access it from a computer or phone. When it was just on the computer, it was more difficult to keep up with it.

MasterStache

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Re: Tracking Spending Post-FIRE
« Reply #57 on: July 06, 2017, 11:50:32 AM »
I am a spreadsheet geek. I track before and will undoubtedly track after.

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Re: Tracking Spending Post-FIRE
« Reply #58 on: July 07, 2017, 08:14:54 AM »
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.

This ^^^ is pretty much where we are at, and have been for some time...
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BoonDogle

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Re: Tracking Spending Post-FIRE
« Reply #59 on: July 07, 2017, 08:38:50 AM »
I am not FIRE but think tracking could be useful to keep track of what is discretionary vs. necessary spending.  In the event of a market downturn, it would be nice to know how much fat you have the ability to trim.

arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #60 on: July 07, 2017, 09:51:55 AM »
I am not FIRE but think tracking could be useful to keep track of what is discretionary vs. necessary spending.  In the event of a market downturn, it would be nice to know how much fat you have the ability to trim.

Or you could just trim fat in a market downturn, or earn more.  But quantifying it way ahead of time for very little purpose doesn't seem super beneficial, to me, IMO.
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BoonDogle

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Re: Tracking Spending Post-FIRE
« Reply #61 on: July 07, 2017, 10:20:24 AM »
I am not FIRE but think tracking could be useful to keep track of what is discretionary vs. necessary spending.  In the event of a market downturn, it would be nice to know how much fat you have the ability to trim.

Or you could just trim fat in a market downturn, or earn more.  But quantifying it way ahead of time for very little purpose doesn't seem super beneficial, to me, IMO.

Peace of mind (at least for me), knowing that if there were a market downturn, I would have the ability to trim $xxxx in advance of it happening.  It could be a source of stress not knowing how much flexibility I had in my spending.

mara

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Re: Tracking Spending Post-FIRE
« Reply #62 on: July 07, 2017, 06:19:31 PM »
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.

I love the idea of doing this, but it hasn't worked for DH and me. We seem to need more structure and accountability, so we're still tracking. Also, when an unexpected expense arises, we can more easily look to see how to shift our spending around to meet the needs

Guide2003

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Re: Tracking Spending Post-FIRE
« Reply #63 on: July 08, 2017, 02:27:58 PM »
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.
I like this! Glad it worked for someone else. "The Millionaire Next Door" called this method "artificial scarcity" by paying yourself first. Makes it sound like a much more sophisticated method when someone comes up talking a bunch of noise about budgeting.
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arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #64 on: July 08, 2017, 03:15:38 PM »
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.
I like this! Glad it worked for someone else. "The Millionaire Next Door" called this method "artificial scarcity" by paying yourself first. Makes it sound like a much more sophisticated method when someone comes up talking a bunch of noise about budgeting.

We do this, but without the artificial scarcity of paying yourself first, or giving ourselves an allowance, or anything like that.

I'm a big believer in paying yourself last. 
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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liberty53

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Re: Tracking Spending Post-FIRE
« Reply #65 on: July 08, 2017, 10:41:01 PM »
I FIRE'd last year and have been tracking less frequently than I did pre-FIRE.

One thing to keep in mind is that even if one decides not to track expenses as frequently or at all post FIRE, it's probably a good idea to at least preserve the system and data for tracking that was used pre-FIRE.

For example, I tend to try to put as much as I can on credit cards for a number of reasons, one of them being the fairly good classification of expenses provided by credit card companies. If I switched to a lot of cash spending I would lose detail necessary to understand my spending. Expense surprises do happen, and it's best to be able to figure out what happened if necessary.

I just looked at my six month expenses and I'm running a little hotter than expected due to travel and gifts. Without the data I would feel a little uncomfortable not being able to do the analysis.


zinethstache

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Re: Tracking Spending Post-FIRE
« Reply #66 on: July 22, 2017, 12:44:23 PM »
I counted every penny until OMY syndrome hit. I sort of lost interest in monitoring our budget as we focused on huge life changes in preparation for FIRE.

Now in FIRE since we've turned our lived upside down I find I am back to being excited to monitor the budget again:) It is a new world and I am having to make many adjustments (all for the good, having to adjust down in most cases and up in a others).

I suspect after we get to know our new spending habits that I will not be as diligent, however now our lives are very simple so it is very easy to track the fewer transactions in Mint.

rubyunrailed

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Re: Tracking Spending Post-FIRE
« Reply #67 on: September 27, 2017, 06:11:22 PM »
wow, what an amazing thread. Super interesting to see the huge variety of responses here!

I'm only a year into FIRE, and I track everything at a super detailed level. (See my journal for the full details.) I started tracking a couple years before I even considered FIRE as an option, because I wanted to know what I was spending and get my spending under control. (I was definitely in the high-income-high-spending boat before.) Tracking everything allowed me to make small changes to bring down my spending in ways that didn't affect my lifestyle, and also gave me a solid idea of what number I needed to consider myself FIREd. We'll see how long I keep up the super detailed tracking, but I suspect I will continue because that's also just part of who I am :-)
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spartana

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Re: Tracking Spending Post-FIRE
« Reply #68 on: September 29, 2017, 07:10:38 PM »
Don't track. Have a pool of money (EF/cash cushion) my passive income goes into each month and if that pool gets too low I'm spending too much (doesn't really matter on what) and if it grows I can save it or spend it freely on "wherever". As long as I live within my passive income amount on average over the year I don't worry what the spending is on.
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arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #69 on: September 30, 2017, 01:19:31 PM »
Since posting the OP over a year ago, I totally stopped tracking. I have no idea how much we spend now. I'll probably do major reconciling at some point and figure out a number, but I couldn't tell you, for example, YTD spending. It's pretty freeing.
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Nords

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Re: Tracking Spending Post-FIRE
« Reply #70 on: September 30, 2017, 01:58:01 PM »
Since posting the OP over a year ago, I totally stopped tracking. I have no idea how much we spend now. I'll probably do major reconciling at some point and figure out a number, but I couldn't tell you, for example, YTD spending. It's pretty freeing.
I love it too, until I start tallying up rental expenses at the end of the year.  Or my spouse asks "When did we buy that broken appliance?!?"

We're finishing up a major rental rehab, and this post is my excuse for not wading into the pile of receipts clamoring for my archival attention...
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arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #71 on: September 30, 2017, 04:12:27 PM »
I love it too, until I start tallying up rental expenses at the end of the year.  Or my spouse asks "When did we buy that broken appliance?!?"

We're finishing up a major rental rehab, and this post is my excuse for not wading into the pile of receipts clamoring for my archival attention...

Yep, rental and business expense tracking unfortunately is still a thing. And a future pain in the *.  :)
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Frugal_is_Fab

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Re: Tracking Spending Post-FIRE
« Reply #72 on: October 17, 2017, 03:11:54 PM »
FIRED this year and I'm finding that spending is much lower than I projected.  I'm not depriving myself of anything I really want so that is a non issue.

I think I'm going to take the tracking level down to getting the annual total spending vs. funds available during the year.   Reinvest the excess each year while keeping an adequate cash cushion for the unexpected.

I used to track month to month to test the feasibility of FIRE.  Now that I'm here I think I can relax some.

NaturallyHappier

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Re: Tracking Spending Post-FIRE
« Reply #73 on: October 17, 2017, 07:54:11 PM »
I have been FIRE for 6 months and I still track every expense.  I actually enjoy comparing expenses to budget to see what expenses are over and under.   I am still paranoid that the money will go out faster than it comes in.  I have a lot of fluff in my budget so I know I can cut expenses as needed, and I still like knowing where I am on the expenses so I can trim if necessary.

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Re: Tracking Spending Post-FIRE
« Reply #74 on: November 02, 2017, 05:56:23 AM »
Interesting...

We’ve been FI for a few years and I found tracking useful far beyond the ‘hobby’ of it. Things change.

We’re travelling RTW as a family of five right now. Two teens and a ten year old. I write down all our spending but don't reconcile what we spend often enough.

Even though I know how it works, I’m continually impressed (I crossed off stunned) by how a few thousand baht here and several thousand dong there and some USD in Cambodia or Euros in Italy add up to substantial sums of money.

We’re fairly liberal in our travel spending but aren’t on vacation so need a reminder of what a foreign dollar is worth. Everything seems a bargain. At first. Especially the beer!

It’s a bit frustrating because we can spend considerably more each year. Though it burns me to overspend on things that don’t require it. Especially for travel in cheap destinations. So I love and need the reminder.

Though almost everything requires an occasional assessment...

We’re supposed to be ‘world schooling’ our ten year old, which I thought was going to be easy. And we were initially a bit stressed about how our two teens would keep up with their school. Turns out we had it completely backwards. The girls have it under control themselves. But we have to give the boy a kick in the pants more than we thought. 

I remember chatting with arebelspy and his best half at Camp Mustache about our world travel plans with the kids. Turns out they were exactly right. But I didn’t even have the right questions.

I’ll keep tracking our spending. At least until we settle back down into a routine I can predict again.

Stachey

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Re: Tracking Spending Post-FIRE
« Reply #75 on: November 02, 2017, 02:22:31 PM »
I track because I find it easier to see how much there is above and beyond the necessities.  It's easier to plan for big budget items that way. 

Billy and Akaisha Kaderli (of Retire Early Living) have a very simple system for tracking their daily expenses to make sure they don't come off the rails.  And they've been FIREd for 30 years so clearly it works.

At the beginning of each month calculate your fixed expenses (eg. rent) /day.
Then each day keep a running total of your expenses divided by how many days you've been keeping track.

For a simple example:
Say rent is 23.33/day
Say you spent 20 on food, etc  on day one.
your calculation would be (23.33 +20)/1 = 43.33

Then the next day you just sat on the beach all day so you didn't spend anything all day.
Your calculation would be (43.33+23.33 +0)/2 = 33.33

The next day you had three beers so spent 15.
Your calculation would be (66.66 +23.33 +15)/3 = 35.00

Pretty soon you get to an average number that doesn't deviate too much from one day to the next.
 If it does, you know you are starting to go off the rails with overspending and can correct for it.

It's a really simple system that only requires a minute or two calculation each day.
 
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arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #76 on: November 02, 2017, 02:40:18 PM »
And they've been FIREd for 30 years so clearly it works.

Billy and Akaisha are awesome. But this sentence doesn't logically follow.

Quote
It's a really simple system that only requires a minute or two calculation each day.

I have a limited number of minutes. 1-2 per day is a lot of my lifetime. :)
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.
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Stachey

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Re: Tracking Spending Post-FIRE
« Reply #77 on: November 02, 2017, 02:48:52 PM »
And they've been FIREd for 30 years so clearly it works.

Billy and Akaisha are awesome. But this sentence doesn't logically follow.

Quote
It's a really simple system that only requires a minute or two calculation each day.

I have a limited number of minutes. 1-2 per day is a lot of my lifetime. :)

Well yes a arebelspy minute is kind of like a football minute or a hockey minute.  You can pack a lot into a minute.   ;-)
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arebelspy

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Re: Tracking Spending Post-FIRE
« Reply #78 on: November 02, 2017, 02:51:44 PM »
Haha, awesome.
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."