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AUTHOR: R Quinn on 3/06/2025

This is not criticism, it’s an inquiry.

Over the years I have read many times on HD about tracking expenses/spending. Some people pursue this in great detail, some seem to approach it like a hobby. There may be something motivating in knowing how every penny is spent. 

As you may suspect, I don’t know in detail where or how we spend our money. As long as the big picture is in balance I am happy. 

What I do know is the bank balance is $X at the end of the month, then on the first of the month a pension deposit is made and on the 2nd and 4th Wednesdays Social Security arrives. At the end of the following month there is a new balance. The difference is what we spent which includes 529 contributions and paying off any credit card balances. 

So, $1,000 end of month bank balance-income added, say $5,000-end of following month $500 balance. We spent or saved $5,500. 

What more do I need to know? Now, if the month end balance had declined as in the example, especially more than once, I want to know what atypical spending occurred and why.

However, the more likely result is the bank balance increased modestly as we rarely spend all income.  If that occurs too often, more is transferred to our emergency fund, which is how we paid for a new water heater (hint Jonathan). 

While my income is a pension, a planned income from any source is the same. 

Satisfy my curiosity. If you are a detail person, why do you track in detail what you spend? 

I asked an AI service why people track expenses and here is what it said. Honestly I don’t see how detailed tracking is necessary for any of these goals. 

• Gaining Financial Awareness:
•    It provides a clear picture of where your money is actually going, often revealing spending habits you weren’t fully aware of.   This awareness empowers you to make informed decisions about your finances.
• Budgeting and Goal Setting:
  • Detailed expense tracking is crucial for creating and maintaining a realistic budget.
  • It helps you identify areas where you can cut back, allowing you to save more money for specific financial goals (e.g., buying a house, paying off debt, retirement).   
• Identifying and Preventing Overspending:
  • By monitoring your expenses closely, you can quickly spot patterns of overspending and take corrective action.   
• Detecting Errors and Fraud:
  • Regularly reviewing your expenses helps you identify any unauthorized or incorrect charges on your accounts.
• Improved Financial Planning:
  • Knowing where your money is going allows for better financial planning for the future.