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Old 01-15-2016, 03:09 PM
 
Location: Close to an earthquake
890 posts, read 678,635 times
Reputation: 2390

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One of the components of wise retirement planning and living in the retirement zone is using all the tools available with one being a personal budget of household income and expenses. While not retired, I've done a better than average job of using this tool so I can answer questions about our family cost of living and be very specific. I'm not saying everyone needs to do this but only this is what I do.

In any event, in summarizing our 2015 and putting together something for 2016, it made me think about how much "fat" is in my budget. This "fat" is the amount that could be reduced if the going got tough and lowering the "cost of doing business" - i.e. living - became necessary.

I don't know that I have an answer in my case because that would take some analysis that I'm not inclined to do right now but I thought it would be fun to throw out on this forum the rhetorical question of how much fat is in your budget.

A percentage would be a good answer for anyone wanting to share.
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Old 01-15-2016, 03:10 PM
 
71,763 posts, read 71,853,273 times
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about 40% -50%
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Old 01-15-2016, 03:18 PM
 
Location: Close to an earthquake
890 posts, read 678,635 times
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Quote:
Originally Posted by mathjak107 View Post
about 40% -50%
Well that's an honest answer.
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Old 01-15-2016, 03:18 PM
 
Location: Eastern UP of Michigan
1,202 posts, read 683,347 times
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We could come up with another 10% probably. Already got rid of cable- only 1 car- and a few other things.


When Jim retired in 2011, to take care of little mama, our gross income was cut by about 1/3. Our major cutting was done at that time.
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Old 01-15-2016, 03:24 PM
 
71,763 posts, read 71,853,273 times
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Quote:
Originally Posted by borninsac View Post
Well that's an honest answer.
1/2 our budget is flexible to some extent . i mean we need to eat and where clothes ,etc but those things to some extent are flexible as far as what we buy and how much ..

when i planned our retirement budget i did so by taking all our non discretionary expenses , adding them up and seeing if we could support 2x that number .

we could so our max budget has 50% being non discretionary .

if you are supporting yourself mostly off your own portfolio you need flexibility as a plan b

Last edited by mathjak107; 01-15-2016 at 03:33 PM..
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Old 01-15-2016, 03:47 PM
 
Location: Near a river
16,042 posts, read 18,991,724 times
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We eat out a lot and give monetary gifts to our kids and grandkids on Christmas and birthdays. We buy most of our foods from pricey Whole Foods. We spend several weekends a year away and sometimes a more. All that is our fat. If the going got tough we would cut out the trips, restaurants and gifts and resort to nonorganic foods (the latter a last resort). I don't know what % that is. There are predictions of rough times ahead, but I won't get into that.
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Old 01-15-2016, 03:57 PM
 
Location: Central NY
4,684 posts, read 3,254,622 times
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Well, here's a little humor.

No fat in my retirement life. It seemed to have all gone to my waistline. : = )
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Old 01-15-2016, 04:01 PM
 
Location: SoCal
13,274 posts, read 6,356,923 times
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20% fat for regular budget, but lots of fat elsewhere including my waistline.
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Old 01-15-2016, 04:02 PM
 
1,076 posts, read 1,119,284 times
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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.
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Old 01-15-2016, 04:23 PM
 
Location: Eastern Tennessee
2,537 posts, read 1,833,174 times
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Interesting because my wife and I just did this calculation last week. In 2015 we were able to put half our take home pay in savings but still spent 10% of the remaining take home on highly discretionary items such as eating out very often, buying 'wants' (like fishing gear, new iPad etc)
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