Do you keep track of every dollar? Should you?

[FIREin2018]

Half of my spend in 2024 is on travel. Easy to track because of Costco Visa's travel category. (Sidenote: 3% cash back on travel)
I can easily account for 20% more of my spend.
But I can't easily think of what I've spent that adds up to the other 30%, which is 5 figures. I would need to go though all my credit card and bank statements. But should i?

I'm not worried about $.
I been FiRED for 7 yrs. Thx to the bull market, I have more $ now than when I Fired. (Have not looked at balances since Trump's tariffs took effect)

When I was working, i never kept track of my spending. As long as my bank acct kept going up each month, i didn't bother.
i looked at my total spend in the year i Fired because I needed to determine my swr%.
And i just looked now because I started a journal, which got me thinking am i still at 4% swr? Having more $ than when I Fired means nothing if my swr % went up. (It didn't)

Since I have no more income coming in (besides dividends and bank interest), I'm thinking I should at least keep track to maybe the closest $1000?
What do you say?

[Dicey]

Short answer: NOPE

Slightly longer answer: You've won the game. Your habits are ingrained. You're going to be fine.

[secondcor521]

I've been FIREd 9 years.  I have a net WR of about 1.45%.  I have ingrained habits.

I still track to the penny, every few days or so, using Quicken, even though I don't need to.

Why?

1.  I generally like to, although as the years pass I like to less and less.

2.  I am trying to spend more, and tracking helps me figure out if I (a) still need to spend more, or (b) am spending about the right amount.

3.  It's become an ingrained habit and system over the past 30 years that doesn't take much time.

4.  Occasionally there is a scenario where I can optimize something (often for taxes) and having the data on hand is helpful for that.

Although honestly, down to the penny every few days is excessive for several of these reasons; I could do it on an as needed basis to the nearest thousand most of the time.

If you don't want to do it and don't see any reason to start and are successful with your plans, I think that's fine.

[oldladystache]

every six months I do a simple check of my assets. As long as it looks good I don't worry about it. So far so good.

[Greystache]

When I first FIRED 10 years ago, I kept track of every dollar on a spreadsheet that I updated monthly. After staying on budget perfectly for a couple years, I updated less and less frequently.  Now I just check my total spend for the year and rebalance my portfolio in January. At first, I had a difficult time transitioning from accumulating to spending. Now, I rarely think about finances.

[Ron Scott]

I ultimately think tracking everything like the cc companies do, by categorizing expenses into logical buckets, is the best approach. I’d find it hard to argue having LESS data about your spending is better than having ACCURATE data. I used to do it but I’m lazy now.

What I do track religiously is my spending on actual outflows for total RE costs and income taxes. And I track the cost of inflation on an annual basis, comparing my current NW to the NW I had on my retirement date inflated to the current year.

If you live below your means, the cost of inflation blows everything else out of the water. Not even close.

[AuspiciousEight]

I feel like this is a personal decision really, and depends on what you value in life, if you enjoy tracking things, and if you feel like that is beneficial, then by all means track everything.

When I was younger and had much less money I tracked everything pretty well. I always knew where the money was going, how to best optimize everything and so on. I spent a lot of time updating spreadsheets.

Now that I have money money doesn't seem as interesting to me. We try and get a good deal on things and have some general idea of trailing twelve months expenses every few months, but outside of this I have no idea what I spend on gas anymore, or milk, bread, etc. It just doesn't seem that interesting or useful to me. I know we're well under 4% withdrawal rate, so why bother tracking?

Tracking every dollar doesn't give me any particular joy in life, and the whole reason I saved so much money was to have the freedom to do what I enjoy most in life.

[blue_green_sparks]

Yes, we track our entire financial situation, month to month, starting a year before I quit working over 6 years ago. 95% of outgoing cash goes through a single checking account, so it is very easy to do. I also project our finances past our expected lifespans, including likely changes. Additional income from social security and RMD's, and additional expenses we will probably incur along the way. My sheet automatically grabs 'real-time' stock valuation.

So far, my year-to-year projections have been incredibly accurate. Why did I wait until my 50s to do this? I am trying to get the younguns in the family to start their financial sheets, but so far, they seem uninterested.

[GuitarStv]

I've always done a yearly (ish) review kind of thing.  Every 10 - 14 months I do a quick snapshot of where I am financially with my investments.  Figure I'd keep that up in retirement.  This allows me to get broad trends (uh oh, looks like the number is doing worse than expected / oh, cool we're doing great) and generally ignore the shorter ups and downs.

[Dicey]

every six months I do a simple check of my assets. As long as it looks good I don't worry about it. So far so good.

[Dicey waves excitedly] Nice to "see" you here, oldladystache!

[MaybeBabyMustache]

I (mostly) enjoy tracking, so I do. It has been very helpful over the past few years to get a better sense of where our money is going, and ensuring it aligns with our priorities. There are probably easier ways to do it, but I use a spreadsheet & just manually enter our spending. It automatically tallies the total by categories I've created.

[2sk22]

I have been tracking and categorizing all of our expenses in Quicken for many years. I find this to be essential in understanding where we stand financially.

[FireLane]

Yes, I still track all my spending.

From a strictly financial perspective, I don't need to. Living within my means is a natural habit at this point, and I'm not worried about money. But it's not burdensome (it takes me 5 or 10 minutes a week), and I like having this data at my fingertips.

I have records going back to 2015, when I started pursuing FIRE. It's fun to do things like compare my spending from one year to the next to see how I'm doing. I can check my personal inflation rate against broader economic trends.

And it keeps me honest. It feels good to find frugal wins that cause my spending to go down! The expense reports are like a record of victory.

[Christof]

I have been tracking and categorizing all of our expenses in Quicken for many years. I find this to be essential in understanding where we stand financially.

Me too... I first used spreadsheets and then bought Quicken 2000 which I still use today. My list of accounts spans the entire screen, because I also keep track of cash-like assets like credit card rewards or hotel points.

[diapasoun]

It sounds like you don't need tracking in order to spend within your means, and you have enough data to know that your WR isn't changing. So unless it would bring you peace or pleasure to do a deeper analysis, why bother?

(And I say this as a person who tracks to the penny, because it does bring me peace and pleasure.)

[FIREin2018]

It sounds like you don't need tracking in order to spend within your means, and you have enough data to know that your WR isn't changing. So unless it would bring you peace or pleasure to do a deeper analysis, why bother?

(And I say this as a person who tracks to the penny, because it does bring me peace and pleasure.)

What I do and best practices are sometimes different things.
Just checking how closely other people who Fired are keeping track of their expenses

[PhilB]

Accounting information is only really useful for two purposes.  Compliance (eg your tax return) and informing management decisions.  You just need enough granularity to meet those goals.

I've ended up with way more than we need, so there is no value for me in having the information to optimise every sub category of expense.  If we were very lean FIRE that would be different.  As it is, I just track three categories that add up to total spend: Holidays, big lumpy one-off items and everything else.  That gives me all the information I need to know how much I can spend.

[Gone Fishing]

Hell, no!  Only reason I look at credit card or bank statements is to check the totals and check for fraud. I do notice if a particular expense ticks up more than it should. I have a rough idea of what we are spending and what our investments are earning.  I do spend around 10-15 hours on taxes each year.  Mostly at year end to decide how much I want to convert to Roth.  Once April rolls around it is just a matter of double checking the numbers and filing.  I probably spent 8 hours on the ACA this year, between filling out the application and weighing the cost/benefit of various plans.  Optimizing taxes/ACA can easily amount to saving equivalent to several months of discretionary spending.  Hate that I have to do it, but the impact is just too much to gloss over.

[catccc]

@diapasoun yes, for peace and pleasure!

I do, but it's like an interesting hobby to me and of personal value. 

I also reconcile transactions every month and check for errors.  Last month was atypical for errors!  We went on a Disney cruise, used two IHG free reward nights for our pre-sail accomodations (separate reservations, one under my name and one under my husband's), and prepaid airport parking via a 3rd party.  The airport parking facility charged $158 when they should have charged us zero, and we got charged for both "free" nights by the hotel.  Overall, it was something like $400 in transactions that I had to get fixed.  Of course, like @Gone Fishing mentioned, you don't need to keep track of every dollar to review your CC statement, but I just happen to do the review as part of a larger accounting system.  I also participate in points and miles activities and tracking everything helps me stay on top of the endless flow of new cards and rate arbitrage optimization.

My expense tracking (via YNAB) is like a journal.  What was the name of that pancake restaurant in Kyoto we enjoyed?  I have that answer in YNAB.  How much did we spend on maintenance in the last 5 years of our old car's life?  Also in YNAB.  What year did we take the family on that camping trip out West?  How much are we spending on gas with two hybrids v. the old '05 and '04 ICEs we got rid of in the last couple years?  in YNAB!

I also don't trust that my habits are truly static/engrained.  I've been on the YMOYL/FIRE train since 2003, and in the last few years, my spending habits have definitely changed, and I like to monitor my spending, review the changes, and ask myself if I'm okay with it or not.

One thing we've been spending way more on is vacations.

2015:
Turks and Caicos for 5 nights
a couple nights camping an hour a way
a couple nights camping 2 hours away
+ visiting family on the opposite coast for the holidays.

2024:
Ski weekend in Feb
Cabin in the mountains for Spring break in March
4 nights in Orlando in June
2 weeks in Japan in July
5 night road trip to Montreal in August
2 different overnight jaunts in nearby cities in September and November
+ visiting family on the opposite cost for the holidays

So I keep track of nearly every dollar, but I don't think everyone should.  I wonder at what point I will stop doing this, and IDK.  Curious for all of those that don't here,

[2sk22]

So I keep track of nearly every dollar, but I don't think everyone should.  I wonder at what point I will stop doing this, and IDK.  Curious for all of those that don't here,

There is a limit to tracking :-) I used to record my car's fuel consumption using the fuelly app. Earlier this year, it suddenly occurred to me that gas is but a tiny fraction of our household expenses so I stopped tracking milage.

[Fomerly known as something]

I’m about to enter into RE.  I’m doing so with a larger budget than I’ve ever thought I’d have.  I’ve recently gotten a bit freer in some of my spending because of that.  I’m tracking for several reasons.

1) to see if I really am spending in the areas I think I am.  And if the spot where I’ve decided I want to spend more (such as travel) are actually “worth it’.
2) to make sure I don’t over shoot in a “dangerous way.”
3) to see on paper that yes, I can “Afford” that when I naturally hesitate about something such as adding an extra night in Juneau before a cruise even though my capital one travel credit “only” covers one night.

[catccc]

So I keep track of nearly every dollar, but I don't think everyone should.  I wonder at what point I will stop doing this, and IDK.  Curious for all of those that don't here,

There is a limit to tracking :-) I used to record my car's fuel consumption using the fuelly app. Earlier this year, it suddenly occurred to me that gas is but a tiny fraction of our household expenses so I stopped tracking milage.

Oh, I just realized I didn’t finish my thought or otherwise edited it out inadvertently.  Was curious for those that don’t track, did you used to, and when did you stop?

There is definitely a limit.  I say I track every dollar, but there are few cash transactions that get forgotten, and there’s no statement to reconcile against, so I just record it on best guess. That’s probably less than $200 per year on 109k ish spending.

We rarely track mileage/fuel consumption.  We did recently bc our new ford hybrid maverick dashboard was reporting 43.9 MPG and we didn’t quite believe it. Our manual calculation was over 45, so now we believe it.

[Christof]

There is definitely a limit.  I say I track every dollar, but there are few cash transactions that get forgotten, and there’s no statement to reconcile against, so I just record it on best guess.

I hate that. People keep telling me that paying cash is the best way to keep track of ones spending, and to me it's the worst. I can account for every cent I spent on a credit card in the past 30 years. Cash, not so much. I got change back in a different currency, I got the wrong amount of change, I can't recall what I spent in cash, because I got no receipt. There's always some amount that i can't account for.

I understand that for some people it's useful to get a certain amount in cash that needs to last a certain amount of time and then not being able to spend any more money once that money is gone. It might be more efficient, it's just not how I operate.

[FireLane]

3) to see on paper that yes, I can “Afford” that when I naturally hesitate about something such as adding an extra night in Juneau before a cruise even though my capital one travel credit “only” covers one night.

I like your point #3 here. Tracking your spending can help you be more frugal by identifying the places where spending money isn't adding to your quality of life. But after you retire, it can also be an antidote to excessive frugality.

You don't want to overspend in retirement, but you also don't want to needlessly deny yourself things that bring you joy. Tracking can be a way of proving to yourself that you're within budget and don't have to sweat the small stuff.

[FIREin2018]

You don't want to overspend in retirement, but you also don't want to needlessly deny yourself things that bring you joy.

I can attest to that.
In May, for the 1st time in my life, I tried Uber eats. I discovered they have BOGO specials.

I spent $100 more in May because of UE.
It was on new (mostly) tasty foods I never would have discovered otherwise.

I have more $ now than when I Fired 7yrs ago because of the bull market. Not sweating spending $100/month more than usual.
Definitely worth the joy it brought to my taste buds. (But at the cost of my waist line)

Here's my journal entry about it:
https://forum.mrmoneymustache.com/journals/unexpectedly-fired-at-age-47-with-no-preparation-thriving-because-dumb-luck/msg3367075/#msg3367075

[FIREin2018]

I'm leaning towards as long as I have more $ than when I Fired, don't worry about spending or tracking that spending. (But obviously still track net worth)

Just as long as I can cut back on spending if I drop below that initial amount. Hopefully i  didn't do a hedonistic adaptation.
Ie: I can't live without my Uber eats. It became a need instead of a want

[MrGreen]

I still track to the penny, every few days or so...even though I don't need to.

Why?

1.  I generally like to, although as the years pass I like to less and less.

2.  I am trying to spend more, and tracking helps me figure out if I (a) still need to spend more, or (b) am spending about the right amount.

3.  It's become an ingrained habit and system...that doesn't take much time.

4.  Occasionally there is a scenario where I can optimize something (often for taxes) and having the data on hand is helpful for that.

Although honestly, down to the penny every few days is excessive for several of these reasons; I could do it on an as needed basis to the nearest thousand most of the time.

This is totally me as well. I won't say it makes me happy, but it scratches the numbers itch I've developed over the years of tracking pre-FIRE and brings a small measure of satisfaction.