Comment by w0m
2 months ago
My wife and I work. We are blessed that we make enough that we buy ~anything reasonable we want, have 2 kids in private school, and max out our 401k/roths/backdoor every year.
What is the value in detailed tracking of personal finance? We audit ~every credit card bill when it comes in for oddities, but don't really pay attention where everything goes as long as more comes in than goes out.
For me I wanted to know how much I'm spending spend in different categories - not just for the phone bill where you can just see what it is every month, but for more irregular expenses: travel, repairs, appliances etc.
So why is this interesting to know? It gives you a better picture of where your money goes, what your bur rate is, how much of your spend is on mandatory stuff (food, rent/mortage etc.) and how much is on things you could potentially cut if need be. It makes it possible to know how far you are from various levels (/lifestyles) of financial independence. I have a pretty good idea that I could make it to retirement even if I permanently lost my job and I know what that lifestyle would roughly be like.
This also makes it possible to do proper budgeting by setting aside realistic amounts even for irregular expenses, so you're essentially 'saving up' for the irregular expenses. Done right, your "expenses" (money set aside in budget) are exactly the same month after month even though your actual money outflows in some months may be much higher. This is both true for the irregular expenses like travel, but also for semi-regular expenses that may come due only annually or every three months (mortgage etc.).
For me personally, it made me feel much more comfortable about spending larger amounts on travel etc. because I've already saved up the money via budgeting and I've never seen it as savings that goes away. Savings are per definition the difference in monthly income vs month set aside in budget. I make sure to be a bit conservative, so I actually also build a buffer on the savings account, usable for truly extraordinary expenses.
But your current situation sounds healthy - and if you have amble cushion, and you're confident it will continue that way and you have no desire to change it yourself, the above is of course less relevant.