For me, using spend tracking software was way too time consuming. I find it easy to track bucket spending by payment method. Most essential expenses like utilities and insurance, are auto paid from our checking account; for others like food and store purchases, we use our primary credit card. For the discretionary bucket, largely subscription and auto-withdrawal fees, we use a second credit card. And for the big lifestyle expenses, mostly travel for us, we use our airline credit card. Easy enough to track actual monthly spending from each source vs historical average and note one-off variations vs rising or falling trends. It may not be as precise an analysis as some would want but it seems to work for us.
I appreciate budget software but there is no way I'm connecting my accounts to a third-party. I don't need another point of failure (hacking) especially with the rate of companies being exposed now days.
Simply choose manual updates. No need to link anything. Budgeting software is not really necessary. But I've had quicken for many years so very easy tonrun a report to see everything. Retirement planning software on the other hand is priceless.
A pocket calendar, $10, is a pretty low tech way to track spending. Get one with a small space for each day. At the end of each month break it down on legal pad into categories. Did this for years, it works
My experience is that my living expenses went down big time when I retired. No more mortgage and no more contributions to pension made a huge impact. But yes, I agree you have to sort out how much your actual outgoing cash will be and make sure you have enough net income to cover the cash outflow. My situation is different than many because my income is 95% is in a pension and social security both of which have cost of living increases.
Many retirement calculators that I've come across let you estimate expenses in retirement as a percentage of your current income, typically 80%. It turned out that my expenses so far (in the second year of retirement) are about 55% of my final salary.
Thanks for the budgeting advice and how to break it down in different categories. I managed to save a lot, but I really don’t know what I spent and I’m sure I’m not the only one. Thanks for a great video.
Every bank/ credit card has a Download button. I've been doing this now for about 2 years. It's an accurate way to see expenses. Knowing this number and what my investments are making are helping me with planning and staying in track. Thank you for your videos!
Most people make retirement planning way too complex. It's not that difficult. Focus on eliminating ALL debt before retiring (including mortgage). Start early and pay yourself first. $500/mo. ($16/day) for 30 years at a 10% return (S&P average over the last 30 years) grows to over $1.1 Million! If you have NO DEBT and don't live in CA, you'll have more than enough to live in most places (if not, MOVE). My folks retired 7 years ago with no debt and about $500K in savings. They left CA and moved to SC. They live a stress free life with their SS and dividend income. They have never taken a penny from their savings and it's growing every year without any additional contributions. So. their savings is really a $500k emergency fund! Think for a moment how much cash you would have every month with no mortgage payment, no car payment, no credit card payment, etc. Bottom line, you don't need a $1 million to retire if you willing to live in a low cost state like SC!
@@gauravipal5691 you may well have such a feeling, but it’s a delusion. If you pay off a 3% mortgage with money you can earn a risk free 5% on, you’re losing money. If that gives you the warm fuzzies, more power to you.
Great video. If anyone on here is a Fidelity customer, they have a great retirement planing tool that includes a retirement monthly expenses worksheet. I find this incredibly helpful. Has all the suggested categories discussed here and can help you estimate monthly costs for some of them as well.
Budgets suck, I went the other way and just spend as little as possible while finding lower cost or free alternatives that are also better. I can roll through retirement with social security alone providing for everything plus $10,000 of fun money. Meanwhile we're continuing to shove money into retirement accounts for the tax savings alone as we have no need of additional spending.
I plan to retire at 62 in another country outside the US that is free, safe and very cheap with a high quality of life. I could fully just rely on only my SS if I wanted to when that times arrives but I'll also have at least one pension, a 403 (b) and a very prolific lnvestment account with my Abby Joseph Cohen my FA. Retiring comfortably in the US these days is almost impossible.
Abby Joseph Cohen hooked me up with a late-stage fund that got me in on private shares of some hot companies before they hit the market or blew up. Those investments totally paid off when the companies went public and their stocks shot up. Now, I’m stoked because I’m heading into retirement with almost a million bucks in my portfolio.
The thing is people often doubt the prospects of financial advisors like Abby Joseph Cohen in business/markets today. Well it gives me more time to get ahead while they stew in their own pity and doubts as they childishly complain about those spreading the word
@@AliciaSalvadore Well her name is 'ABBY JOSEPH COHEN SERVICES'. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
@@AliciaSalvadore Abby Joseph Cohen Services is a portfolio manager and investment advisor. She gained recognition as a former employee at Goldman Sachs; a renowned investor she is. Abby Joseph Cohen has demonstrated expertise in investment strategies and has been involved in managing portfolios and providing guidance to clients.
I've been tracking my spending for a while with a pre-retirement budget and also created a projected post retirement budget. In general my spending will go down except for occasional travel. One thing that I only recently got some more concrete numbers on was for healthcare, I had budgeted a pretty high number for insurance so I think I will fall well below that number
As far as food, I personally think people are eating far too much food and when they do eat, it’s the wrong food. I eat one good meal a day and that is plenty less than four dollars a day
I see a big problem tracking expenses from Costco, one usually buys many things from various categories... food, toys, furniture, clothing... no software will be able track those expenditures
I have a tiny house 444 ft.² even that’s too big but it’s great 😊 it’s paid for. I could’ve stayed in a city where my expenses were four times as much but I said nope there’s no way I’m going to do that so I moved back home to where I grew up 😊
Plaid uses screenscrape technology, which some institutions try to thwart. The more successful connections use api. I’m not as debt averse as tax averse in strategizing my retirement plan and I would rather put my money to work, increasing capital gain, than being debt free. The money I withdraw will be from the principal and not the capital gains (homegrown dividends - coined by one of our investment advisors). When I croak, the nextgen will enjoy the cost basis step up.
This is a factor that I hear ignored over and over when I listen to people talking about how much you should have for retirement. They seem to always do the calculations as though you're still paying for your kids braces, three cars, a home, and typical credit card debt. If on the other hand, you've become debt free, including your house, and your biggest expense is your utility bill, you're living expenses might be dramatically lower at retirement. Now all of a sudden instead of 10,000 a month in expenses, you're at 1500 a month, and even a modest retirement income might be pretty comfortable.
Yep, the last few months I have been doing my budget right down to the last dollar seeing where I spend where I can eliminate. I am a pretty frugal person instead of drying my clothes in the dryer. I’m hanging them out. I’m unplugging things that I don’t use this is the main thing you need to make a budget to know yourself mark down everything, where you’re at!
If you have gas heat and appliances, clothes drying is the biggest electricity hog (excluding AC). If you've got a back yard (or if your'e otherwise inventive) you can dry your clothes without using the dryer. My dryer vents out very close to my AC, so I NEVER dry clothes in the dryer when it's hot out. Always on the line, and maybe I stick clothes in the dryer for a fluff.
I think the most important number is how long you are going to live. Based on Dr Peter Attia discussion and my analysis of this mine is 86 years. Sadly my spending per month last year was $8686.28 per month. Housing was about $4100 of that which includes the big four, mortgage taxes insurance and repairs/maintenance. Retirement is a bit daunting for me.
I would argue that we need to track our expenses for a full year. Many of us travel in the summer and don’t travel the rest of the year so our expenses increase in the summer. We need an annual cost of living, not a monthly cost of living.
Traveling gives me anxiety so I'm not going to spend more in that category thankfully. I track EVERYTHING. I can tell you how much I spent on milk last year LOL, I'm a nerd.
Seem to be spending more getting ready for retirement. Like a newer used car which I paid cash for. A new roof that the Amish are putting on. Hopefully this comes to an end.
Its not rocket science. Let your hard earned savings work harder for you. Retired 10 years early, Geo Arbitrage. Work and saved in developed countries, retire early in safe and comfortable developing ones. Live very comfortably on 2.5k a month.. 😊😊😊
Can you explain how secure these bank and brokerage connections are? This is my number one concern using these apps. Is there a read only function and security from having for account hacked and drained?
These aggregators make your data more secure, but I don’t understand all the in and outs of how it works. Even if someone hacked your account, they couldn’t access your actual bank account. A little Googling will explain how it all works. But in short, yes, it’s only read only.
Nope, got is as right as I can likely get it to be. Thought about all those things you mention, car fund, medical, home maintenance... So while it's probably still wrong because we don't have a crystal ball. Way more accurate than your generic stats though.
My house coasts me $22,000/year for my mortgage, property taxes, insurance, and utilities. That doesn’t include maintenance like replacing my hot water heater or other things. That’s just my base monthly costs.
Have to disagree BIGTIME on the average food bill. Nobody today is surviving on $6500 annually for food! As sad as it is, that number is at least $10K.
The most important number BEFORE retiring is 0! ZERO DEBT!
Exactly, mortgage paid, cash for vehicles, no credit card balance, pay off every month.
Totally agree, will have my house 100% paid 2027( no other loans), the same year will retired at 62.
Me and my wife have zero debt but I still have too much doubt about retiring.
For me, using spend tracking software was way too time consuming. I find it easy to track bucket spending by payment method. Most essential expenses like utilities and insurance, are auto paid from our checking account; for others like food and store purchases, we use our primary credit card. For the discretionary bucket, largely subscription and auto-withdrawal fees, we use a second credit card. And for the big lifestyle expenses, mostly travel for us, we use our airline credit card. Easy enough to track actual monthly spending from each source vs historical average and note one-off variations vs rising or falling trends. It may not be as precise an analysis as some would want but it seems to work for us.
I appreciate budget software but there is no way I'm connecting my accounts to a third-party. I don't need another point of failure (hacking) especially with the rate of companies being exposed now days.
Exactly, I use a notebook and write everything down. It’s not that difficult.
Don't have to link accounts to use models..just input numbers.
Simply choose manual updates. No need to link anything.
Budgeting software is not really necessary. But I've had quicken for many years so very easy tonrun a report to see everything. Retirement planning software on the other hand is priceless.
@@ivanvarykino8202What retirement planning software do you use?
HELL NO!
A pocket calendar, $10, is a pretty low tech way to track spending. Get one with a small space for each day. At the end of each month break it down on legal pad into categories. Did this for years, it works
My experience is that my living expenses went down big time when I retired. No more mortgage and no more contributions to pension made a huge impact. But yes, I agree you have to sort out how much your actual outgoing cash will be and make sure you have enough net income to cover the cash outflow. My situation is different than many because my income is 95% is in a pension and social security both of which have cost of living increases.
Many retirement calculators that I've come across let you estimate expenses in retirement as a percentage of your current income, typically 80%. It turned out that my expenses so far (in the second year of retirement) are about 55% of my final salary.
Thanks for the budgeting advice and how to break it down in different categories. I managed to save a lot, but I really don’t know what I spent and I’m sure I’m not the only one. Thanks for a great video.
Every bank/ credit card has a Download button. I've been doing this now for about 2 years. It's an accurate way to see expenses. Knowing this number and what my investments are making are helping me with planning and staying in track. Thank you for your videos!
Who the heck is spending 9000 to 11000 a month to live!? Thats completely ridiculous!
My property tax is 83 a month. My insurance is 86 a month. I’m grateful I live somewhere where it’s still fairly cheap.
Most people make retirement planning way too complex. It's not that difficult. Focus on eliminating ALL debt before retiring (including mortgage). Start early and pay yourself first. $500/mo. ($16/day) for 30 years at a 10% return (S&P average over the last 30 years) grows to over $1.1 Million! If you have NO DEBT and don't live in CA, you'll have more than enough to live in most places (if not, MOVE). My folks retired 7 years ago with no debt and about $500K in savings. They left CA and moved to SC. They live a stress free life with their SS and dividend income. They have never taken a penny from their savings and it's growing every year without any additional contributions. So. their savings is really a $500k emergency fund! Think for a moment how much cash you would have every month with no mortgage payment, no car payment, no credit card payment, etc. Bottom line, you don't need a $1 million to retire if you willing to live in a low cost state like SC!
if your mortgage rate is less than the money market rate on savings, which is true for many people right now, you'd be a fool to pay it off early
@@DavidsonFootball1There is a mental peace about knowing no one can take your home away, even if you lose your job.
@@gauravipal5691 you may well have such a feeling, but it’s a delusion. If you pay off a 3% mortgage with money you can earn a risk free 5% on, you’re losing money. If that gives you the warm fuzzies, more power to you.
Monarch has been very valuable in understanding our spending.
Great video. If anyone on here is a Fidelity customer, they have a great retirement planing tool that includes a retirement monthly expenses worksheet. I find this incredibly helpful. Has all the suggested categories discussed here and can help you estimate monthly costs for some of them as well.
Budgets suck, I went the other way and just spend as little as possible while finding lower cost or free alternatives that are also better. I can roll through retirement with social security alone providing for everything plus $10,000 of fun money. Meanwhile we're continuing to shove money into retirement accounts for the tax savings alone as we have no need of additional spending.
Thank you for sharing this information. Hopefully, I will learn how to keep more of what I worked so hard to save, by watching your videos.
We’re on track to retire with same income that we have now…and with no debts. God willing, we will do well in our old age.
I plan to retire at 62 in another country outside the US that is free, safe and very cheap with a high quality of life. I could fully just rely on only my SS if I wanted to when that times arrives but I'll also have at least one pension, a 403 (b) and a very prolific lnvestment account with my Abby Joseph Cohen my FA. Retiring comfortably in the US these days is almost impossible.
How can i reach this abby Joseph Cohen, if you don't mind me asking?
Abby Joseph Cohen hooked me up with a late-stage fund that got me in on private shares of some hot companies before they hit the market or blew up. Those investments totally paid off when the companies went public and their stocks shot up. Now, I’m stoked because I’m heading into retirement with almost a million bucks in my portfolio.
The thing is people often doubt the prospects of financial advisors like Abby Joseph Cohen in business/markets today. Well it gives me more time to get ahead while they stew in their own pity and doubts as they childishly complain about those spreading the word
@@AliciaSalvadore
Well her name is 'ABBY JOSEPH COHEN SERVICES'. Just research the name. You'd find necessary details to work with a correspondence to set up an appointment.
@@AliciaSalvadore
Abby Joseph Cohen Services is a portfolio manager and investment advisor. She gained recognition as a former employee at Goldman Sachs; a renowned investor she is. Abby Joseph Cohen has demonstrated expertise in investment strategies and has been involved in managing portfolios and providing guidance to clients.
I've been tracking my spending for a while with a pre-retirement budget and also created a projected post retirement budget. In general my spending will go down except for occasional travel. One thing that I only recently got some more concrete numbers on was for healthcare, I had budgeted a pretty high number for insurance so I think I will fall well below that number
My biggest expense is giving to other people. In fact, I might have a little problem with that.😂
People actually spend 12,000 per month? Holy crap I am way far behind.
Great video! I’ll be checking out monarch money for sure. I used personal capital but it had similar issues that you mentioned with mint.
As far as food, I personally think people are eating far too much food and when they do eat, it’s the wrong food. I eat one good meal a day and that is plenty less than four dollars a day
I see a big problem tracking expenses from Costco, one usually buys many things from various categories... food, toys, furniture, clothing... no software will be able track those expenditures
Same. I split it out manually. Costco lets you pull a digital version of your receipt on their website
I have a tiny house 444 ft.² even that’s too big but it’s great 😊 it’s paid for. I could’ve stayed in a city where my expenses were four times as much but I said nope there’s no way I’m going to do that so I moved back home to where I grew up 😊
Plaid uses screenscrape technology, which some institutions try to thwart. The more successful connections use api. I’m not as debt averse as tax averse in strategizing my retirement plan and I would rather put my money to work, increasing capital gain, than being debt free. The money I withdraw will be from the principal and not the capital gains (homegrown dividends - coined by one of our investment advisors). When I croak, the nextgen will enjoy the cost basis step up.
This is a factor that I hear ignored over and over when I listen to people talking about how much you should have for retirement. They seem to always do the calculations as though you're still paying for your kids braces, three cars, a home, and typical credit card debt. If on the other hand, you've become debt free, including your house, and your biggest expense is your utility bill, you're living expenses might be dramatically lower at retirement. Now all of a sudden instead of 10,000 a month in expenses, you're at 1500 a month, and even a modest retirement income might be pretty comfortable.
Yep, the last few months I have been doing my budget right down to the last dollar seeing where I spend where I can eliminate. I am a pretty frugal person instead of drying my clothes in the dryer. I’m hanging them out. I’m unplugging things that I don’t use this is the main thing you need to make a budget to know yourself mark down everything, where you’re at!
If you have gas heat and appliances, clothes drying is the biggest electricity hog (excluding AC). If you've got a back yard (or if your'e otherwise inventive) you can dry your clothes without using the dryer. My dryer vents out very close to my AC, so I NEVER dry clothes in the dryer when it's hot out. Always on the line, and maybe I stick clothes in the dryer for a fluff.
I think the most important number is how long you are going to live. Based on Dr Peter Attia discussion and my analysis of this mine is 86 years. Sadly my spending per month last year was $8686.28 per month. Housing was about $4100 of that which includes the big four, mortgage taxes insurance and repairs/maintenance. Retirement is a bit daunting for me.
Oppps. Missed that number. Can't go back 17 years now.
I would argue that we need to track our expenses for a full year. Many of us travel in the summer and don’t travel the rest of the year so our expenses increase in the summer.
We need an annual cost of living, not a monthly cost of living.
I calculate trip costs as a separate goal and most people simply can’t keep it up for a year - if you can, I agree it’s best.
Traveling gives me anxiety so I'm not going to spend more in that category thankfully. I track EVERYTHING. I can tell you how much I spent on milk last year LOL, I'm a nerd.
The magical FU number is US $2.5M per person. 25M gernerates 100k yearly.
Love your channel. Have you looked at New Day software for financial planning?
Seem to be spending more getting ready for retirement. Like a newer used car which I paid cash for. A new roof that the Amish are putting on. Hopefully this comes to an end.
I've tried several aggregators and they are maddening how unreliable they are.
Its not rocket science. Let your hard earned savings work harder for you. Retired 10 years early, Geo Arbitrage. Work and saved in developed countries, retire early in safe and comfortable developing ones. Live very comfortably on 2.5k a month.. 😊😊😊
Which developing country is safe & comfortable?
Love your content.
$8k income per month but only $687k net worth. Wow that is low, with that income you should be way higher.
What happens when an aggregator is hacked? Have you exposed all of your account numbers? Too scary.
Can you explain how secure these bank and brokerage connections are? This is my number one concern using these apps. Is there a read only function and security from having for account hacked and drained?
These aggregators make your data more secure, but I don’t understand all the in and outs of how it works. Even if someone hacked your account, they couldn’t access your actual bank account. A little Googling will explain how it all works. But in short, yes, it’s only read only.
Nope, got is as right as I can likely get it to be. Thought about all those things you mention, car fund, medical, home maintenance... So while it's probably still wrong because we don't have a crystal ball. Way more accurate than your generic stats though.
19k a year on the house?
That's literally less than i spend on my mortgage, insurance, AND taxes...
It's an average, so many of the people included in this (it's ALL retirees) do not have a mortgage. It's taxes, insurance, maintenance.
Yes, upkeep is the biggest housing expense.
My house coasts me $22,000/year for my mortgage, property taxes, insurance, and utilities. That doesn’t include maintenance like replacing my hot water heater or other things. That’s just my base monthly costs.
How is monarch better than quicken?
I find it more user friendly. Use whatever works for you!
Have to disagree BIGTIME on the average food bill. Nobody today is surviving on $6500 annually for food! As sad as it is, that number is at least $10K.
It’s an average from the BLS. But it’s sure higher for us.
...what? Wife and I are on track for less than 5k for all food spending. Don't say nobody!
Keep in mind the average actual spend for one person is likely for multiple people. The stated figure is a person
Guarantee you'll need a new roof!
Before watching let me guess
1a. expenses
1b. RMDs
Ok got it 😅
O debt. Live below your mean.
What percentage do you overestimate for planning a retirement budget?
Who spends $10,000/month?
How does monarch compare to the EveryDollar budget app?
Haven’t compared that specifically, but it’s better than everything else I’ve looked at.
I want a good income in retirement too!!!!!
10K/month? I guess I'm the wrong demographic for your channel! :o Yikes!
Or I just like round numbers that make math easy for illustrations.
VO 2 max?
Ha.
I’d say that number is 25 or better yet 50😁
$10k a month?
Mathematically, the most important number is 1.
Unless you eat Taco Bell...then the most important number is #2.
@@tomj528😂
Intro too long i quit after 1 minute.
This is not applicable because of the rise of the National Debt. Inflation will continue to go up and it is going out of control…
Someone hasn't paid attention to financial news lately.