Do you track your spending?

Yes I track my spending - but this is really an exercise that people only seem to go through just before retirement, so you are not alone, OP.

My suggestion is to start with the big items.

A. Housing expenses (this can be rent or mortgage and should also include property taxes and average yearly maintenance). This is likely to be your largest single expense. It would range from $10,000/year for someone who owns his house outright, to $50,000 or more.

B. Food. This should also include dining out. For many people, this might be as much as $1000/month. Maybe much more if a person doesn't cook for himself.

C. Transportation costs - this should include gas, oil changes, annual registration, tag fees, other maintenance, and someone retiring at 65 is likely to need another vehicle at some point, so that should be factored in. If a person lives in a big city and relies on public transport, taxis and Ubers, those costs should be estimated

D. Income Taxes

E. Medical Costs

F. Vacation and Travel expenses.

G. Recurring expenses such as utilities, (heat, water, electricity, natural gas), as well as internet, cable TV, newspaper and magazine subscriptions, recurring donations to charities and/or political parties and candidates, hair cuts, gym memberships.

H. Miscellaneous

I. Estimated medical expenses.

Then a person needs to calculate all sources of income after retirement. SS, pension, IRA distributions, etc. Those figures should be somewhat in balance with expenses or you have to look for expenses that you can shed.

Yes OP, my parents tracked their spending as my mother was an office secretary. She also ran ( in the background) my father's business., so it's in the blood. R1 has covered the bases very well. We started 'The Retirement spreadsheets' 5 years out from our retirements. We're Downunder so a little different here. It's well worth it OP. Good luck.

Not closely; I know exactly where the big numbers need to land overall, and I know how to cut back on non necessities when needed. Tracking the day to day minutiae just seems so tedious.

I also have retirement on the horizon. I do not spend lavishly and am on track with my retirement financial goals but I need to get a better handle on where I am wasting money. A lot of it is on convenience.

I spend less than I make... that's all I know. I put a pretty decent amount into retirement savings annually, conservatively invested earning 4%, which is low, but I don't have the appetite for risk. My attitude on spending and saving is that at the end of the day, I don't have to put kids through college so there's a few mistakes I can afford to make along the way.

I've had a pretty sophisticated spreadsheet of my income, expenses, and assets for the last 12 years. I am a year or two away from retirement at this point. I do not track the minutia and have my daily spending as a single budget line. I could probably cut back some there, but it is not necessary at the moment. It is probably overkill, but I find it helpful in helping me realize I will be OK if I walked away from the soul killing grind I find myself in.

I don’t track it. I know what I spend and there’s always a balance in the account at the end of the month. I’m already retired, keep a year’s worth of expenses in an emergency fund, and know that while I’d hate to take out more than the annual RMDs from my 401k, it’s there if I ever need a big chunk of cash.

I don't religiously track my spending, but I do scan my bank account on a regular basis to check for any rogue transactions.

I'm not rich, but I'm fortunate enough to spend less than I make, so I don't really need to 'budget' as such. I've never been one for spending money frivously so I've got some savings.

If I ever were in a situation where money was tight I'd definitely put all my outgoings on a spreadsheet and remove any I'd class as non-essential. I sometimes consider doing it anyway, but I don't want to remove all joy from life. For example, I could live without Netflix, Amazon Prime, etc but I can afford them and they're not exactly 'luxuries'. I don't want to be one of those boring penny-pinchers who spend most of their life tracking every single penny. It's not like I've got any children to leave it all to!

One thing I recommend for those who can't be bothered to track their spending, is please DO take 5 minutes a month to review your monthly credit card statement(s) and bank statements. My husband probably spends an extra $125 a month on average, which is $1.5K+ a year, on accidential auto-pays and stupid annual Apple app auto-renews and media subscription auto-renews and similar. Stuff that he had no idea he was still on the hook for. I'm always nudging him to actually look at it and cancel shit (we share bank/checking and keep separate credit cards)

R1's list covers my needs, but also illustrates how highly variable personal budgets are -- not just as a reflection of relative wealth but also the extent to which factors of geography and age and personal priorities can steer the ship.

My HOUSING expenses are exceptionally low because I own outright and property taxation is accomplished when purchasing a property. My annual tax is nothing, about €300/year. MAINTENANCE expenses of supplies and service calls and cleaners comes up to about €2400/year.

FOOD, including eating out often, is much less than €1000/month.

TRANSPORTATION costs almost nothing. I live in a city center and walk everywhere. Maybe €200 a year in local taxis and the rare bus fare.

INCOME TAXES: As I'm retired, it's usually next to nothing.

MEDICAL: €150/year total, rounding way up for controlled prescription drug costs and non-prescription pharmacy products like bandages, cough syrup, ibuprofen...

RECURRING EXPENSES: household utilities, phone service, TV subscriptions, news subscriptions, a couple print magazines I still receive, haircuts... Under €5000/year, leaving out charities

TRAVEL is a big and important thing, but the costs can vary a lot year to year, but 5 figures

MISC. The tricky one and expensive, because it all varies so much. Art and furniture are big items. Lesser expenses: books, pets, household goods, gifts to friends, concert tickets...

I've been keeping an Excel spreadsheet of my spending since 2019. I retired in 2016 with an $800/mo. pension from my state govt. job, moved back down to FL, sold my not-paid-for house in St. Pete that my renters completely trashed, and bought this 1972 trailer on 1/2 acre in a rural FL county. I still had 20K left over from selling my house, so I bought a gently used big Harley touring bike to replace the one I'd wrecked and left 10K in the bank in case of emergencies. I was still 4 years away from being able to collect SS at 62.

But I survived. I had PT WFH jobs reading/scoring college applications and rating various academic exam essays, and that helped me keep body and soul together. And of course, as a veteran, I could go to the VA to get free (lousy, but free) medical care. When I finally started getting my SS at 62, I felt like I'd hit the lottery.

That preface is so you don't faint when I tell you that my monthly living expenses (without counting my pittance of property taxes and my paid for truck insurance) are (brace yourself!):

[bold]$600/month[/bold] And that includes food, water, electricity, cell phone, NYT sub., and high-speed internet. I seldom go out to eat, and my big expenses are basically travel and my motorcycle.

Of course, I buy other miscellaneous items; for example, I see on my spreadsheet my dental appointment, my ridiculously expensive Woxer women's boxer briefs, some skirts for the immigration appointments in Panama (they like to see that), a visit from a plumber, etc. But I never have to worry about paying for those things because of my low living expenses.

And since I've been retired, I bought an electric riding mower (close to 3K), a new-to-me-truck, a new-to-me motorcycle, and wood panels and posts to fence in the front of my yard, which I did myself after I first moved down here. I always tell people that the fence isn't perfect, but thel abor was free!

I come from a family who were/are just as frugal as I am, although their quality of life is much better, because they made a lot more money and never moved or job hopped like I did. Of course, they never went to college (I started undergrad when I was 30) and never had student loans, either.

In retrospect, I think things turned out OK. I mean, I don't need much -- as long as I have a motorcycle, a roof over my head, and food to eat, I'm good. Now if only my little dog would hurry up and die in her sleep so I can ride/move to Panama...

Not really. I have a general idea of how much I spend every month, but tracking individual purchases and expenditures sounds really tedious.