Discretionary and Essential: "Spending Plan" & Budgeting Tools

Do you have a spending plan??

My Spending: "Discretionary" vs "Essential"...

During retirement, as with all phases of life, it is essential to understand the difference between discretionary "nice-to-have" and essential or fixed expenses as part of your budget.  

                                                    Photo: D. McCallister.  Falls Creek, AK

My Spending Plan

"Making a budget or "spending plan" may not be the first thing you look forward to in retirement, but it's one of the most important things to do to assure that your retirement is on the right path. Along with an income plan that can deliver a steady "retirement paycheck" and an investing strategy that allows a portion of your nest egg the chance to grow, a realistic budget—based on all the sources of income you have coming every month—is an essential building block of retirement."  Source: Fidelity. 

Itemizing Your Essential Expenses

To start, itemize your monthly "essential" expenses.  This list should include items such as utilities, food, fuel and vehicle maintenance, insurance premiums (health, home, and auto), taxes.

Itemizing Your Guaranteed Income

Then, itemize your "guaranteed" income sources.  This should include monthly social security, annuity, investment income. 

It is important that your monthly "essential" expenses and income sources match!  

Budget for Discretionary or "Nice-to-Have"

Then, budget for "discretionary" or "nice-to-have" expenses.  This will include: entertainment, travel, dining. 

Exceptional Budgeting Tools: (for free)

- Retirement Expenses Worksheet - Vanguard. Retirement Expenses Worksheet | Vanguard

- "Budgeting Discretionary, Variable, and Fixed Expenses".  Budgeting Discretionary, Variable, and Fixed Expenses (thebalancemoney.com)

- Personal Finance Made Simple - Intuit Mint provides a robust set of automated tools for tracking your personal finances and creating multiple budgets to view your spending across different categories. Intuit Mint review: Personal finance made simple | Tom's Guide (tomsguide.com)

Your Spending Plan: Needs to Work for You

"Making and following a budget can help increase your financial security..."1 Your "spending plan" needs to work for you!!

Call to Action: Updating my spending plan is one of the most important things I do... 


RESOURCES THAT MIGHT BE HELPFUL..

"Ready to retire? You still need a budget".  Budgeting in retirement | Fidelity

"Retirement Expenses Worksheet".  Retirement Expenses Worksheet | Vanguard

"Budgeting Discretionary, Variable, and Fixed Expenses".  Budgeting Discretionary, Variable, and Fixed Expenses (thebalancemoney.com)

"Determining your budget in retirement". Determining your budget in retirement | BlackRock

"Estimate your expenses and income in retirement". retirement_expense-income_worksheets.pdf (tiaa.org)

Managing money, made simple.  Personal finance app.  Intuit.  Budget Tracker & Planner | Free Online Money Management | Mint (intuit.com)

How to Protect Yourself from Financial Ruin in Retirement. Mia Taylor.  msn.com  How to Protect Yourself From Financial Ruin in Retirement (msn.com)   (Note: an excellent article)


SO...What'd we miss??

Tell us about how you implemented your spending plan?

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