Comment by bombcar
3 hours ago
You don’t even need to be precise for net worth, whereas double-entry accounting needs to be.
For personal finance the problem is almost always very obvious ($3,000 on candles) and all the spreadsheets and budgets won’t change that.
I find there area few things the budgets and spreadsheets help with from a personal finance perspective:
- Values vs reality: A $3000 candle budget is fine, but if you're spending $10/work-day on candles it might be easier to see when that accumulates and you can compare it against your longer-term aspirational goals. This is especially true for less tangible expenses like subscriptions where it can be difficult to see "I'm spending $3000/year on candles I never burn" from ground level.
- Planning and decision-making: It's easier to make good life decisions (e.g. "should I take $job" or "can I buy $house") if you have an accurate accounting of your life expenses.