In these uncertain times, the US Federal Reserve has cut interest rates to historical lows. The connection between the federal funds rate and mortgage rates is only indirect but it has resulted in historically low mortgage rates. I’ve been able to save a few hundred dollars each month (!) by refinancing. This equates to about 5% of my budget and so, although the process was slightly tortuous because so many people are refinancing and because I’m now retired, it was worth the investment of time.

I’ve budgeted for the past 20 years. Initially, I used Microsoft Money and, when that was discontinued, I migrated to Quicken. There’s a business idiom “If you don’t measure it, you can’t manage it” which I think is applicable to managing personal finances. Off-the-top of my head, I have a reasonable hunch about monthly expenses including my mortgage, Internet, cellphone etc. Other bills, including gas and electric vary particulary between Winter and Summer.

An immediate problem I must solve is to create a buffer (of cash) for the next few years. I’m going to play it very safe by holding cash but it will provide me with some assurance that I can weather a downtown in the stock markets. I have a budget and so I have some confidence in understanding how much money I should need each year. The budget provides me with a minimum spend.