Retirement planners and especially those looking to retire early (defined as anywhere from age 32 to 60) are obsessed with budgets and knowing how much they spend.
Gilbert recommended this: “We’ve never really been big budgeters. For a year, we tracked every single penny we spent because we wanted to know as realistically as we could, what our spending was. And then we adjusted it for how we thought things would change in retirement, etc…”
My answer is how can you not know what you spend?
What you spend is your after tax take home pay less savings of all types. What else could your spending be, unless of course, you are living off credit cards not fully paid each month.
I never lived with a budget nor did I track spending. That’s because we saved first, never paid interest on a credit card thereby being forced to live within our means. That can be true at just about any income level. What varies, of course, is lifestyle.
When planning to retire, making a list of what expenses are most likely to change is a good idea. But in my opinion assuming any significant reduction in spending because of retirement is not a good idea. The one exception may be a mortgage paid off immediately before retirement. Otherwise, no mortgage is not a change. The one major added cost, is likely health insurance, Especially if retiring before age 65.
Assume you will still save in retirement. Perhaps not at the same level as when planning for retirement, but to establish and maintain a contingency fund and if you are so inclined, a travel or fun fund.