Sample Retirement Budgets

I am near retirement. (Couple of years). I have maybe too many categories in my budget I am using now. 

I have used other budget programs in the past so I might have brought over bad habits. Is having 100 different categories too many? These are in 15 different groups.

I enjoy the process but in retirement my planners always ask what my planned "Essential" Expenses are vs my "Optional" Expenses are.  

Are there any good resources for having a more streamlined budget that can somehow sort between essential and optional and still have individual envelopes inside them? 

Starting with 100 different categories, I may want some advice on how to pare these down. Thanks

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  • Hello, Roger!

    I don't think 100 categories is necessarily too many. In my family budget, we have 91 categories (not counting Credit Card Payment categories).

    Could we be get by with fewer categories? Sure. But I think the additional cognitive load of adding a category is pretty small, and it's not an irrevocable decision. If adding a new category makes it easier for you to set aside money for a specific expense, do it! Categories are free.

    Here are a couple of situations where I'd consider reducing the number of categories:

    • You have a category that's no longer needed because you no longer have expenses in that category. I know this is obvious, but if you pay off the mortgage, hide the Mortgage category!
    • You find yourself always vacillating between two similar categories for a particular type of expense. For example, if you had categories for "Movies" and "Entertainment", you might decide you didn't need both.

    I love the idea of seeing sample retirement budgets! Serving retired YNABers is definitely something I'd like us to do a better job with, although the basics are the same.

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  • Number of categories is somewhat irrelevant. What is relevant is, does the granularity of 100 categories help you make decisions? 

    If the answer there is no, as it seems to be, then there are two ways to go about reviewing your categories: 1) Start from scratch, and see what you come up with. The YNAB initial budget format has suggested category set up that may help. 2) Go through your categories and see what groups with what. 

    One of the nice things about YNAB is it allows for grouping categories without removing any categories, via category groups. 

    You're the only one who can determine what your priorities are, and therefore what is essential vs. optional. This blog post may help:

    Like 3
    • Fuzzball Meows starting from scratch would erase current data and history?

  • Orange Panther   Starting from scratch would create a new budget that doesn't have your current data and history. Your current budget would retain the data and history, as long as you don't delete it.  You would have to go swap between budgets to look things up, but the data will be available to you. 

    I'm pretty sure a Fresh Start does the same thing - it just keeps your current categories and accounts, but not any of the transactions, balances, etc. 

  • You have a category because you want to track something or because you want to protect something. 

    If you don’t care if a particular category of purchase is tracked, don’t have a category. Extreme example: almost everything I buy that is not eating out is “shopping.” Stamps? Humidifier?  Jeans? All shopping. I don’t care to track more finely grained than that. 

    Similarly, if you need to know how much you spend on xyz, a separate category is good. I refuse to not have pets. So I always want to know how much it costs me to have pets. I have a cat category and a dog category, and those are not “shopping.” 

    if that calculus results in 25 categories, great. If it results in 200 categories, still great. It’s not the sheer count which matters. 

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  • WordTenor said:

     . . . 🤣

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