I don't track my expenses anymore

And that helps me a lot!

How I started out

When I started out with my first salary, I’d track each expense as soon as I spent that money. I had an app where I could log them, and I’d flip my phone out after each UPI QR scan, credit card swipe or giving away hard cash. There was so much advice out there that tracking spending would help me be that little more wary of spending extravagantly.

To be honest I was always frugal, and spent little on frivolous items. I would spend on food (because otherwise what is even the point of living?) and electronics with decent specs to last me a few years. But things like clothes or luxury vehicles didn’t excite me a lot. I would wear old baggy clothes and a sweatshirt on them which made me look boring, but I was okay with that.

After a few months, I got the hang of my spending and could predict my monthly spending amounts, bar some infrequent purchases here and there. Then the value of tracking my spending to the rupee lost its sheen.

How it was lost

Once my expenses settled down, I knew how much I’d save from each paycheck. At the start of each month, I would invest that amount and then assume the rest was spending money. I was okay with this because I was paying myself first and my goals were covered. This post by Freefincal also validated my thought process.

Once I knew my financial goals were on track, it didn’t make sense to track my spending closely. My habits of expenses were formed, so it wasn’t worth the effort. Whatever was left at the end of the month rolled over to next month’s spending. This covered any ad-hoc purchases over the fixed expenses.

In the end I earn money to improve my quality of life - in the present and the future. My future goals are taken care of by my investments, so I’d rather spend the rest for my present. And not logging each entry frees up my time to do other, albeit non-productive, stuff.

How I do it now

I’ve recently had a major lifestyle change - I got married! So for these few months I have been roughly tracking my expenses to figure out the new baseline. There have been major expenses to set up our new home so my expenses haven’t settled down.

I think major life changes require some tracking of expenses to figure out my new savings rate and to ensure that my spending is still in line with my savings goals. But once the outgo has stabilized, I’ll mostly go back to my earlier state of not tracking them.

I’m going to keep track of my investments though, and try to increase it year-on-year to meet my short-term goals and reach financial independence.

Wrapping up

What I’d tell my younger self - Go nuts tracking your expenses for a few months. Once you know what you’re spending on and investing sufficiently, let go of the spending app and get a life.

Until Next time!