I might have mentioned before that my wife and I don’t really keep a household budget. We used to be very, very diligent about it, but over the years we just stopped. I could tell you what we roughly spend each month, but not without actually adding it up.
I only really know if we are spending too much by looking at our long-term net worth. Luckily, over the last 5 years, our balance been going up faster than our original FIRE plan, so I guess we are not over budget. There’s no sense in spending time on something that’s not a problem.
Similarly, we don’t really save up for big things we want to buy anymore either. If we want something, we just get the $$$ from savings.
The biggest things we might buy are cars or vacations. I put together a spending plan for both of these when we first retired, but we’ve pretty regularly underspent in both categories.
For cars, our plan was to buy vehicles that are a year or two old – with the warranty intact – and then keep them until they are 6 years old or 100K miles. That was the plan. In reality, my wife’s car is now 9 years old and probably only has 65K miles. Every summer she says she wants to look around for a newer one, but there isn’t a rush since hers is in such great shape.
We’re going to the car show in our metro area today. They are holding it outside on our State Fair grounds to deal with the pandemic issues. It should be a nice sunny day to see what she is most interested in. Since we don’t have a budget, I might just look to trade mine out early too! 🙂
How discipline do you have for budgeting & making big purchases?
Image: BMW Munich