Finally stopped tracking our spending - am I missing any reasons to do it?

[Lorenzo]

OP tracked for 25 years, the last 8 of which has been in retirement. I'd say yes, they don't need to track their spending. I, in contrast, never tracked spending my entire working life. At times during my career(s) I was paid well enough that I had "enough" to buy whatever I felt I needed. Things are tighter now. (In hindsight, a little tracking of expenses might have encouraged more frugality.) Now transitioning into retirement I am doing this for the first time in my life, and it's eye-opening how much we spend on some things. Will I continue doing it for the next 8 years? I doubt it. Once we settle into something resembling a stable retirement lifestyle I doubt that tracking expenses will have the same utility. I'd say tracking is most useful for the few years before a major lifestyle change and a few years after.

 

[Ozz]

We do not track spending categories, rather look at monthly bank statement for total withdrawals/spending. Monthly average is compared with estimated budget of expenses at beginning of year. Monthly income only consists of SS & RMDs.
So far this has worked for us.

 

[HFWR]

After enough years, I find that my checking account actually increases, as have my savings, MM, and CD holdings. Thus, tracking spending has lost its urgency, and so is tracked more loosely.

 

[Koolau]

After enough years, I find that my checking account actually increases, as have my savings, MM, and CD holdings. Thus, tracking spending has lost its urgency, and so is tracked more loosely.

I suppose that's where I've ended up as well. Not a major reason to track spending when my NW increases every year after almost 20 years of FIRE.

It occurs to me that maybe I should track my spending now to be sure I'm spending enough! I'm beginning to wonder how I'm going to dispose of my "excess." Good problem to have.

 

[johnmiller13]

I have tracked our spending at a reasonably detailed level for 25 years. It was invaluable in planning our financial future and confirming we were financially ready to retire. Now that we’ve been retired for over 8 years, I decided I don’t really need to track it anymore. We have substantially more financial assets than we did 8 years ago, so I am thinking we no longer need to think too much about how we spend our money. The notable exceptions could be things we need for tax purposes such as medical expenses, charitable contributions, and any major capital expenditures on our home so we have a reliable record of our cost basis in the event of a future sale.

Are there any other categories or reasons to track detailed spending? I did a “macro” analysis for 2024 and looked at cash that came in, cash that went out for major non-recurring expenses such as major home renovations, and the change in total cash balance year on year, enabling me to see how much in total we spent on day to day living including travel. The “normal” cash outflow looked about the same as the last several years so I decided not to do all the detailed work to document every category of spend.

I have to admit it was rather freeing, but I’m so accustomed to tracking that I’m wondering if there is a good reason to do it.

It sounds like you’ve built a really solid foundation, and honestly, if your financial position is strong and steady, stepping back from detailed tracking makes sense. I did something similar a few years into retirement—switched from monthly line-item tracking to just keeping an eye on the big picture and watching for any red flags.

I still jot down major expenses like you mentioned—healthcare, charitable donations, and anything tied to the house. The only other category I loosely monitor is subscriptions and recurring charges. Those can creep up without notice and eat into cash flow over time.

If your “macro” analysis shows things are staying on track, there’s no real reason to track every dollar anymore. Enjoy the freedom—you’ve earned it.

 

[sakowitzm]

Thanks to so many of you for helping me to believe (possibly incorrectly!) that I'm not the only one!!! Been tracking for many, many years, and now 8 years into retirement. Don't think I'll ever stop. Oh... and I also balance my checkbook every month. Why? Who knows. I don't think I've ever found an error.

 

[Dtail]

Thanks to so many of you for helping me to believe (possibly incorrectly!) that I'm not the only one!!! Been tracking for many, many years, and now 8 years into retirement. Don't think I'll ever stop. Oh... and I also balance my checkbook every month. Why? Who knows. I don't think I've ever found an error.

Track expenses meticulously but do not balance the checkbook. However less than 10 checks a year.

 

[Texas Proud]

Thanks to so many of you for helping me to believe (possibly incorrectly!) that I'm not the only one!!! Been tracking for many, many years, and now 8 years into retirement. Don't think I'll ever stop. Oh... and I also balance my checkbook every month. Why? Who knows. I don't think I've ever found an error.

My questions would be... how has this changed how you spend money?

I tracked for years... and had yelling matches with DW on spending... she never changed.. so I could keep getting frustrated or just stop... I decided to stop..

It has not affected our lifestyle... we still spend money like we were... but we never have spend willy-nilly...

So, IMO, if you have never changed anything you do while tracking spending what is the point?

 

[TheWizard]

My questions would be... how has this changed how you spend money?

I tracked for years... and had yelling matches with DW on spending... she never changed.. so I could keep getting frustrated or just stop... I decided to stop..

It has not affected our lifestyle... we still spend money like we were... but we never have spend willy-nilly...

So, IMO, if you have never changed anything you do while tracking spending what is the point?

Similarly, it's rumored that folks who use credit cards spend more than folks who spend cash.
Some probably do.
Ignore them and focus on your own situation.

Note: I have never tracked my own spending and don't yell at myself either...

 

[sakowitzm]

My questions would be... how has this changed how you spend money?

I tracked for years... and had yelling matches with DW on spending... she never changed.. so I could keep getting frustrated or just stop... I decided to stop..

It has not affected our lifestyle... we still spend money like we were... but we never have spend willy-nilly...

So, IMO, if you have never changed anything you do while tracking spending what is the point?

Answer: Has not changed how I spend money at all. I've never been profligate with money; basically spent whatever I/we (when I was married) wanted; made enough to cover it. And today, 8 years into retirement, this is still true. But to answer the question - the point is to recognize if spending does jump up, and/or investment portfolio takes a big enough hit that I might have to consider changing my spending habits. So every year I feed the updated spending figure into a couple of spreadsheet models to get a view of whether or not "enough" is still "enough".

 

[audreyh1]

At this point we just look at travel, gifting, and the total after taxes.

Still generally underspending our annual income/withdrawals. If it suddenly exceeds you can bet we’d be looking more carefully.

 

[Texas Proud]

Answer: Has not changed how I spend money at all. I've never been profligate with money; basically spent whatever I/we (when I was married) wanted; made enough to cover it. And today, 8 years into retirement, this is still true. But to answer the question - the point is to recognize if spending does jump up, and/or investment portfolio takes a big enough hit that I might have to consider changing my spending habits. So every year I feed the updated spending figure into a couple of spreadsheet models to get a view of whether or not "enough" is still "enough".

I do not disagree with you on knowing if something changes, but I have found that over the past 5 or so years where I have not been tracking spending that I can 'feel' if there are changes...

I pay the CC bills each month... I know how much I have to transfer to the checking account to pay all bills.. I notice if something has changed and almost always know why... the expensive vacation or my newest one buying new car...

I look at the total portfolio amount in Schwab where I have it pull my Vanguard numbers and can eye ball what is happening... even after 5 years I have not made any changes that matter because of changes... even with the big hit the past few months to a year... OH, and you can see what is happening on a graph over a good amount of time...

So I do what you say without doing any tracking on where we are spending... or even the value of the portfolio... a worksheet with details would not have changed anything we have done... so I am glad that I stopped tracking...

 

[RetMD21]

......

It occurs to me that maybe I should track my spending now to be sure I'm spending enough! I'm beginning to wonder how I'm going to dispose of my "excess." Good problem to have.

I have a monthly transfer from the investment account to the checking account to help with this "problem."

 

[Finance Dave]

Yeah, we simply look at cash in and cash out for the year plus change in Net Worth yearly. That's all we seem to need for our comfort level. Even after 20 years of FIRE, NW is still going up (knock on wood). No detail really needed.

+1. We've been fired for about 6 years now and we only track our spending at a very high level. The one thing we do focus on is large unusual items...we make a list of things that may come up over the next 1-3 years and make sure we're ready for them. Although we do have plenty of emergency funds, still helps to think about. Examples:

1) Moving to a more expensive location and will need to add $300k to get the house we want
2) One car is long in the tooth, will need to buy new (and pay cash) within 2 years
3) Our privacy fence needs re-stained...estimate $4,000
4) Furnace is 31 years old...could go at any time $10,000

 

[jkern]

I have tracked our spending at a reasonably detailed level for 25 years. It was invaluable in planning our financial future and confirming we were financially ready to retire. Now that we’ve been retired for over 8 years, I decided I don’t really need to track it anymore. We have substantially more financial assets than we did 8 years ago, so I am thinking we no longer need to think too much about how we spend our money. The notable exceptions could be things we need for tax purposes such as medical expenses, charitable contributions, and any major capital expenditures on our home so we have a reliable record of our cost basis in the event of a future sale.

Are there any other categories or reasons to track detailed spending? I did a “macro” analysis for 2024 and looked at cash that came in, cash that went out for major non-recurring expenses such as major home renovations, and the change in total cash balance year on year, enabling me to see how much in total we spent on day to day living including travel. The “normal” cash outflow looked about the same as the last several years so I decided not to do all the detailed work to document every category of spend.

I have to admit it was rather freeing, but I’m so accustomed to tracking that I’m wondering if there is a good reason to do it.

I have been tracking my spending for about 35 years and retired for 16 years. I probably would feel lost if I didn't do it. It's like a security blanket.

 

[OnTheBeach]

As a CPA/MBA and 30 years of various accounting jobs including the last 25 as Chief Financial Officer / Chief Operating Officer of hedge funds - I enjoy tracking my expenses using Quicken - and I always will. I have spreadsheets tracking my investments ( Market Value, Cost Basis, and after tax value), Budget, cash flow projections etc. As I always say - everyone is different and we need to respect it. I am comfortable tracking my expenses because I like data. If others are comfortable without tracking the data - good for them.

 

[brett]

14 years retired. Only track total annual after tax spend.

Is is consistent with prior years?

Are there expense items such as insurances or comms that need to be re-negotiated and a change of vendors because of increasing cost or market changes?

Is the basic spend in line with our income stream, absent investments income?

After that it is all about investments and tax.

 

[gamboolman]

Congratulations on giving up trying to be an obsessive. If that tendency isn't hard-wired, it hard to develop and maintain. If it is, counseling won't help

I have it. Was helpful a few years ago to know where the money had gone to figure out where changes could be made. Different circumstances now, really not necessary.

But I will fight myself to the end to ensure that the $6 I spent at Ace Hardware tonight is properly categorized as "New Home Setup"

We're about 4-1/2 year into retirement and what Gator said is us....We still track, but not really necessary.

And, yes we to continue to haggle over what category to put the "$6 I spent at Ace Hardware tonight"

Old habits and all....

 

[sengsational]

And, yes we to continue to haggle over what category to put the "$6 I spent at Ace Hardware tonight"

The database that supports my spend tracking software got some kind of corruption (like 20 years ago) such that new budget categories could no longer be added. That has helped me kick the habit, to some extent. I still add transactions, but don't fret too much about getting those transactions in the exact category; somewhere under "house" is good enough for the $6 at Ace Hardware.

The only reports I run are for travel, and that's just "gee-whiz... was that trip three times as fun, because the per-day cost was three fold higher". Oh, I do run one report for the entire previous year, so I can see things year to year, but I've been retired long enough where that's getting boring. I have long ago admitted to myself that tracking spending is a hobby of mine, and doesn't serve a central purpose.

 

[pizza4me]

I have a cashflow spreadsheet which forecasts expenses and income by month. I'm not obsessed with the granular spending, but I do like to anticipate upcoming big fixed costs like property tax, insurance and vehicle licenses.
The cashflow spreadsheet updates my annual tax forecast. This is useful for managing income from dividends, capital gains, Roth conversions and IRA distributions so that I don't bust MAGI thresholds for medicare premiums.
Everbody needs a hobby.

 

[sengsational]

Everbody needs a hobby.

I started a cash flow sheet when I retired. I do something similar...taxes, gifting are called out separately, but everything else goes into the burn rate. I project the year using the burn rate and it's amazing how well actuals track the plan with such a simple technique.

The cash flow sheet has just the checking account totals. That's the balance I project out for the next 12 months. The lumpy transactions are taxes, gifting, and transfers from investment accounts. I put those in there in advance, along with the monthly burn rate. The projected checking balance has a variance from the actual balance every month, but it's a surprisingly small amount, usually. At the end of the year I make the projected equal actual and if there's a big enough delta, try to figure out why (more travel than expected, less travel than expected, etc).

Definitely a hobby. I don't "need" to do it, but a long time ago, for a short duration, I was a corporate financial analyst. And before that, at school, I was a TA for "engineering economy" which is financial analysis for engineers. So this kind of tinkering is in my bones.

 

[steelpony10]

I have tracked our spending at a reasonably detailed level for 25 years. It was invaluable in planning our financial future and confirming we were financially ready to retire. Now that we’ve been retired for over 8 years, I decided I don’t really need to track it anymore. We have substantially more financial assets than we did 8 years ago, so I am thinking we no longer need to think too much about how we spend our money. The notable exceptions could be things we need for tax purposes such as medical expenses, charitable contributions, and any major capital expenditures on our home so we have a reliable record of our cost basis in the event of a future sale.

Are there any other categories or reasons to track detailed spending? I did a “macro” analysis for 2024 and looked at cash that came in, cash that went out for major non-recurring expenses such as major home renovations, and the change in total cash balance year on year, enabling me to see how much in total we spent on day to day living including travel. The “normal” cash outflow looked about the same as the last several years so I decided not to do all the detailed work to document every category of spend.

I have to admit it was rather freeing, but I’m so accustomed to tracking that I’m wondering if there is a good reason to do it.

I get a month by month detail of spending and income from our broker at the end of each year with a grand total. I divide it by 12 and record that for each 5 year period calculating a quick rolling personal rate of increase. I check our monthly statement for scam charges every month.

That’s about it. I still see income goes up faster then our spending. So far so good.

 

[brett]

I track larger recurring expenses that can be negotiated or shopped on an annual basis.

Mostly insurances and communications. But only on renewal in the case of insurances and competitive activity for cell/cable/internet charges.

Travel is based on a competitive marketplace. Go, no go, or go somewhere else or do something different. Based on our respective bucket lists, the current travel offerings, and our perception of value.

The rest....it is what it is. Including capital items that require investment/replacement.

We don't sweat the small stuff or understandable larger YoY variations-plus or minus.

 

[Original Wally]

But, but, but... Yes, I admit I am OCD and I embrace it! Retired Accountant and I just HAVE to track stuff.
Can't help it. All financial goes into Quicken. BUT I ALSO keep a SEPARATE spreadsheet of assets, and where we stand in relation to a "plan" I put together before retiring in 2009. (We are ahead of plan!)

Worst example, I suppose, is that we bought a new place 6 years ago and I have a separate spreadsheet for our electricity usage by day. I know it is a sickness, but harmless I suppose. Keeps me out of cheap bars and away from loose women.
Molly tolerates it. << My position with respect to her is "I am on thing ice and there is global warming"
Next month will be 52 years ... unless she terminates the deal before then...

 

[audreyh1]

Cash flow is straightforward for me as I withdraw a year’s worth of funds every Jan and place it in high yield savings. Then it’s just a matter of sending cash to various accounts as needed to pay bills. Any income generated by the portfolio stays in the portfolio until the end of the year.