Give your retirement budget a try before you actually retire

We tried out our retirement budget for a full year before pulling the trigger.  This step has been the most important and insightful thing we’ve done since we started considering early retirement.

Throughout the trial year, we made several adjustments to the budget.  Some categories went up and some went down.

We had 4 categories of spending that surprised us:

Our truck and toy hauler

1 Work on travel trailer.  We needed to have some unexpected work done on our travel trailer.  We were able to keep costs down by doing most of the work ourselves, but our budget still didn’t cover everything.  We’ve increased the budget for 2019.  We assume we’ll continue to have similar expenses since we’ll be living in our travel trailer for at least 5 months this year.

2 Unexpected travel.  Unfortunately, we had 4 deaths in our family this year.  We have a small amount set aside for vacations and personal travel, but the expenses associated with last-minute airline tickets, hotels, rental cars, etc. were too much for our little budget.  We don’t think we’ll increase the budget going forward, but it’s something to consider if you have aging or ill parents or grandparents.

3 Annual subscriptions.  One budget category we forgot altogether was subscription fees for things like Amazon Prime, Costco, and credit cards.  These fees added up to nearly $1,000, so we included a new subscriptions budget category for 2019. We also decided to stop using one of our specialty credit cards to avoid the $95 annual fee.  We will use our other credit card for all purchases to ensure we get those valuable points!

Just a few of our tennis shoes!

4 Tennis shoes.  We play a lot of tennis and pickleball.  Our shoes wore out much more quickly than we thought they would!  We’d guess we went through a new pair of tennis shoes at least every other month.  Some shoes wore out faster than that.  Tennis shoes are included in our clothing and shoe budget.  We have $100 set aside per month, but that just didn’t cover it!

We also had a couple surprises in how little we spent on 2 budget categories during our trial year:

Eating out.  We ended up under-spending on restaurants every month.  We didn’t stop eating out; we just stopped ordering multiple cocktails and tried out local happy hours. It’s amazing how a restaurant bill can double when you’re ordering alcohol!

Gas.  We really didn’t know how much to budget for gas.  We were so used to commuting and travelling several miles to get to the closest restaurant.  Turns out we didn’t use nearly as much fuel as we expected since we were working remotely and moved to the city.  The only exception was for unexpected travel and extra trips to see family.

How did we track our budget?  We originally started tracking our expenses through the Mint app.  However, we quickly realized we needed more detail and control over reporting and categorization.  We switched to Quicken after a couple months, and we haven’t looked back!  Quicken makes it so easy to track and categorize expenses real-time. We sit down once a week and review all expenses and investment income.  That way we’re not surprised at the end of the month.

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