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Old 01-16-2016, 08:09 AM
 
Location: Grove City, Ohio
10,131 posts, read 12,378,690 times
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We are shooting for at least 50% after housing, all utilities including cell phones, various insurances and $100/week for basic survival food.

Our biggest bill every month is medical when you combine Part B, Plan G, Plan D and dental.
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Old 01-16-2016, 08:17 AM
 
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medical insurance is our 2nd biggest . we just got raised to 389.50 a month from 104.00 because in 2014 we had a big income .

i think for anyone utilizing equity's in their plan they need discretionary income they can cut back .

if everything is a need and we get a prolonged down turn they can be in worse shape .
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Old 01-16-2016, 08:17 AM
 
Location: Loudon, TN
5,769 posts, read 4,830,089 times
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I never had a budget per se, although I've always known my income and my basic expenses and made sure that I lived within my means. In retirement we just do our monthly bank statement reconciliation ("Honey, did you spend $78 dollars at some place called Cato's?"), and any excess at the end of the month just gets swept into savings. Before we retired we used to save a specific amount each month at the beginning of the month, now it's just whatever is left over at the end of the month. If we have a big expense, like the annual propane refill, and we look like we are going to overspend for the month, then we cut back on the "fat". Our fat is eating out, buying fun things on the internet, spending on things for the garden or house, or groceries that we don't absolutely need. I shop sales for our pantry needs, so we could probably go without going to the grocery store for a month or more, except for milk and produce. I would say we have about 50% fat, or discretionary spending/savings per month.
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Old 01-16-2016, 08:22 AM
 
29,774 posts, read 34,860,277 times
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Quote:
Originally Posted by mathjak107 View Post
medical insurance is our 2nd biggest . we just got raised to 389.50 a month from 104.00 because in 2014 we had a big income .

i think for anyone utilizing equity's in their plan they need discretionary income they can cut back .

if everything is a need and we get a prolonged down turn they can be in worse shape .
Yes, yes and yes. Also being a realist we are prepared for the worse and a 25 percent cut in pensions and Social Security. No need to convince me it can't happen this is the old Boy Scout thinking be prepared!
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Old 01-16-2016, 08:33 AM
 
Location: North Idaho
2,172 posts, read 2,081,550 times
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For planning purposes I have our discretionary spending at about 20% of our total spending, but in truly hard times we could cut some of those non-discretionary spending even further. I'd guess we could cut 30-35% of our spending if we had to.

Dave
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Old 01-16-2016, 08:45 AM
 
71,511 posts, read 71,694,121 times
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Quote:
Originally Posted by TuborgP View Post
Yes, yes and yes. Also being a realist we are prepared for the worse and a 25 percent cut in pensions and Social Security. No need to convince me it can't happen this is the old Boy Scout thinking be prepared!
yep , good planning allows for all these disasters , bad markets and cuts . it does not try to rule them out .

the first thing i noticed on the new fidelity retirement planner if you pick the worst case mode is it assumes right off the bat you lost 15% 1st year .
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Old 01-16-2016, 09:50 AM
 
Location: Close to an earthquake
890 posts, read 676,795 times
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Lots of great shares here and I knew there would be. I don't consider additions to savings or debt reduction to be fat in the budget because both add to net worth.
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Old 01-16-2016, 10:01 AM
 
Location: Idaho
1,452 posts, read 1,153,447 times
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We never have a budget. I did not tally up our annual income and expenses until last year when I prepared a spreadsheet to decide whether to take the early retirement buyout. I had a good idea that it would be doable but wanted to confirm with actual numbers.

The spreadsheet showed our annual essential or non-discretionary spending was at around $24K and the discretionary portion at around $16K or 40% of the total $40K annual expenses.

We have always lived quite frugally so there is hardly any fat in our non-discretionary spending. I consider the discretionary spending (on our flying, rowing, travelling, charity giving) to be good gravy and not fat ;-)

Almost all the financial articles that I have seen stress the important of 'setting a budget'. I think we have done quite well in spite of never having set a budget.

Our focus has always been first on living as frugally as we can, second is to save as much as needed for goals (retirement: max out on 401K, IRA then college account), third is to make sure that all the essential living expenses are covered before spending any money on the non-essential items. The frugality principle applies to the non-discretionary spending as well. Splurging (having an exquisite meal, staying at a luxurious lodging etc) is done very sparingly only to mark special occasions.

I feel quite secured in our retirement and will continue to enjoy the 'gravy' in spite of the recent market downturn. We had set aside enough cash to cover our living expenses in the next few year. As I detailed in a post in another thread, we only plan to 'dip' into this cash portion of our saving in less than 2 years and should be able to live comfortably with just SS payments, my husband current tiny pension and my expected incoming modest annuity.

Last edited by BellaDL; 01-16-2016 at 10:42 AM..
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Old 01-16-2016, 10:10 AM
 
Location: SW Florida
9,745 posts, read 7,027,781 times
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Quote:
Originally Posted by organic_donna View Post
I spent my whole life looking for ways to cut more fat from my budget. Retirement is for enjoying the money I worked so hard to save. If I have to try and cut back again, it would have to be from something catastrophic that has happened to me. I will worry about that if it happens and not now.
I think that is where we are too. We do have a good retirement income between the pensions, SS and some from my part-time consulting work, but we also thought it was important to have as little debt as possible in retirement, as you just never know what can happen, so our regular expenses aren't that high.. As a result we save quite a bit of our income ( it's second nature for us to do so), but still feel like we should be able to splurge a little when we want to. I guess we could cut back on the cable/phone/internet package, and get rid of the second car. But those cars are old reliable Hondas that don't cost that much to maintain and run, so I am not sure the savings in getting rid of one of them would be that much.
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Old 01-16-2016, 10:13 AM
 
Location: Close to an earthquake
890 posts, read 676,795 times
Reputation: 2390
Quote:
Originally Posted by BellaDL View Post
We never have a budget. I did not tally up our annual income and expenses until last year when I prepare a spreadsheet to decide whether to take the early retirement buyout. I had a good idea that it would be doable but wanted to confirm with actual numbers.

The spreadsheet showed our annual essential or non-discretionary spending was at around $24K and the discretionary portion at around $16K or 40% of the total $40K annual expenses.

We have always living quite frugally so there is hardly any fat in our non-discretionary spending. I consider the discretionary spending (on our flying, rowing, travelling, charity giving) to be good gravy and not fat ;-)

Almost all the financial articles that I have seen stress the important of 'setting a budget'. I think we have done quite well in spite of never having set a budget.

Our focus has always been first on living as frugally as we can, second is to save as much as needed for goals (retirement: max out on 401K, IRA then college account), third is to make sure that all the essential living expenses are covered before spending any money on the non-essential items. The frugality principle applies to the non-discretionary spending as well. Splurging (having an exquisite meal, staying at a luxurious lodging etc) is done very sparingly only to mark special occasions.

I feel quite secured in our retirement and will continue to enjoy the 'gravy' in spite of the recent market downturn. We had set aside enough cash to cover our living expenses in the next few year. As I detailed in a post in another thread, we only plan to 'dip' into this cash portion of our saving in less than 2 years and should be able to live comfortably with just SS payments, my husband current tiny pension and my expected incoming modest annuity.
Thanks for the intimate sharing; much appreciated.

I summarize stuff because we have several rental properties and I need the info for tax purposes so the time it takes to do this right makes it easy to summarize everything else. A couple items to share about us:

(1) We do not spend big money on cars; either their purchase or operating costs;

(2) We do not spend big money on clothes. My wife is a 10th degree black belt in thrift store shopping and dresses well. I'm a 10th degree black belt in wearing my clothes forever. I think it was only a couple years ago that I finally got rid of a pair of polyester bell bottom cuffed slacks.

(3) We spend big money on health insurance and funding our health savings accounts to the tune of about $22,000 a year. I'm self-employed so that cost is ours to pay.

(4) We spend about $12,000 on food and eating out.

(5) I do not do any of the rental property repairs but rather hire to have all work done. I hire good help and not those standing in Front of Home Depot looking for a day wage.

(6) We spent almost $9,000 last year traveling to Phoenix to visit our son and two new grandchildren including airfare, car rentals, lodging and food several times during the year. Now looking at a second home there.

I find that this information (the annual summary) helps a lot in my retirement planning journey. I could retire right now but hesitate to do so. And this is what I've discovered to be the case with many of client also capable of retiring right now. This has taught me it's the emotional stuff that must be conquered before climbing the wall over into retirement-land.
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