Budgeting in retirement

fred246

I am convinced that spreadsheets have been very important for my finances. It's not just the amount it's also the dates. Gas, electricity, broadband, insurance, savings accounts all have to be renogitiated and renewed at intervals. So by glancing at a spreadsheet I can check that all my direct debits are needed and cancel those that I don't need. I know exactly when I need to renew utilities etc. Apart from standing orders and direct debits everything else goes on the credit card. I normally just read the statement out loud and ask her what everything was for and if it was really necessary. Everything always is.

michaels

fred246 wrote: »

I am convinced that spreadsheets have been very important for my finances. It's not just the amount it's also the dates. Gas, electricity, broadband, insurance, savings accounts all have to be renogitiated and renewed at intervals. So by glancing at a spreadsheet I can check that all my direct debits are needed and cancel those that I don't need. I know exactly when I need to renew utilities etc. Apart from standing orders and direct debits everything else goes on the credit card. I normally just read the statement out loud and ask her what everything was for and if it was really necessary. Everything always is.

I don't think we would have enough time for this...

JoeEngland

jimi_man wrote: »

Yes, I agree with this. Retirement shoud be stress free and not having to worry about every last penny in a spreadsheet. Financially I want to be the same or (preferably) better than when I was working, which means being able to afford all the holidays and luxuries currently as well as saving money every month. If I'm forced to scrimp and save or shop in Lidl, then I'd rather work for a bit longer.


(I should add that this is not a dig at Lidl. Some of their stuff is actually OK, but the point I am making is that I don't want to be forced to shop there all the time through budget constraints.)

A couple of years ago we started shopping at Lidl after snobbishly thinking the products would be poor quality. Not only do we save a lot of money by doing this but some things like fruit and veg are better than from Sainsburys where we used to shop. We still get a few things from Sainsburys that Lidl don't sell, or a couple of things aren't good enough quality. I view shopping at Lidl not as scrimping but avoiding wasting money by paying more than necessary.

Triumph13

One of the beauties of being retired is having the time to go to lots of different shops rather than trying to cram everything into one visit to one supermarket. We know what to buy from Lidl, what from Tesco, Sainsburys, Waitrose, Home Bargains and what to get from which market stall. There is so much variation in both price and quality that it really does pay to shop around.
As to budgeting, I know that detailed budgets work for some people, but I have only every tracked total spend and, like ML, made sure I could cover that comfortably before retiring. Part of the reason I've never needed a detailed budget is that I always examine all spending critically before getting my wallet out rather than checking after the event how I'm doing against budget.

OldMusicGuy

Marine_life wrote: »

If your expenditure is running at a level where you need a detailed budget then you're probably not yet ready to retire.

Totally disagree with this. I retired earlier than planned for health reasons. If I'd carried on for another 3-4 years I would have been able to save a lot more, and also would have had more years when I was not decumulating. It was doing a detailed budget and financial plan that gave me the confidence to retire earlier than planned. If I had stayed on for longer, I would not have needed such close financial controls.

Also, as I have a large DC pot but no secure DB income, I think it would be easy to overspend in the early years of retirement (because psychologically that large pot of money looks tempting and there's plenty of time for it to recover).

For me, retiring early and making the most of my remaining life was more important than risking my health by staying in a high-stress job. If that means being careful with money, I'll pay that price.

Triumph13

OldMusicGuy wrote: »

For me, retiring early and making the most of my remaining life was more important than risking my health by staying in a high-stress job. If that means being careful with money, I'll pay that price.

For those fortunate enough to have a choice it comes down to balancing the stress of working against the stress of managing on a possibly too tight budget. That will have a different answer for everyone.

OldMusicGuy

Triumph13 wrote: »

For those fortunate enough to have a choice it comes down to balancing the stress of working against the stress of managing on a possibly too tight budget. That will have a different answer for everyone.

I wouldn't say I was fortunate to have a choice. By working hard and saving hard I was able to get to a point that I could retire earlier than I had planned if we were prepared to live more frugally than we had been. Fortune didn't play that much of a role in it, good planning did (hence the spreadsheets).

But a big part of our retirement is getting away from consumerism and living a more sustainable lifestyle. We came to that conclusion once I started thinking about early retirement and what retirement was "for". I appreciate not everyone will feel that way.

badmemory

I've been amazed since I retired at how much less my "housekeeping" is. I used to bomb into the local big supermarket, charge round as fast as possible then go home & put it all away. Job done. Since I have retired & I am now keeping my son to as he is too unwell to work at present, I visit at least 3 supermarkets, if I don't pick a wonky trolley it is good exercise, I have a comprehensive shopping list & rarely need to throw anything away. I retired on pretty much the same income as when I worked with no real work expenses & it is now keeping 2 of us instead of just me. This is including extra power for 2 of us to be in most of the day rather than out at work. I certainly don't feel that we have cut out or down on anything. I just buy with a little more attention to what I am buying & where I am buying it from.

enthusiasticsaver

Some useful observations there folks so thanks for that. It seems lots of people do still budget in retirement, whether loosely or in more detail. I am not sure that I agree with the premise that if you need to budget you cannot afford to retire. We do shop at Lidl's and sometimes Waitrose or Tesco's. We are careful with our money as we were when working but we do holidays, days out etc more now as we have more time so that costs. By the time our state pensions kick in we will have a bigger income than when we worked but I still think we will budget as it is a lifelong habit that helps me feel secure and have confidence we are financially ok.

fred246

Almost all areas of spending can be adjusted. When you are retired it is much easier to do that. The biggest one that springs to mind is cars. We run two cars but don't need to. My plan is that if our children ever have a car problem I will be able to lend them one. Younger working people are so much more dependent on them. We could easily go down to one car or even none at all. Food can be bought for peanuts or it's nice to eat out. There are fantastic clothes bargains in charity shops but it's nice to buy some new stuff. Utility bills can all be changed apart from council tax that would mean moving house. We love holidays and that's the most difficult part. We will have more holidays but are flexible so we can get bargains and travel at off peak times. Will stay in anything from posh hotels, caravans, airbnb etc. We have retired with plenty of cash we think but will adjust according to investment performance. While we were working we always had 7 weeks holidays a year. Will be interesting to see what happens in retirement.