When people imagine early retirement, they often assume that you stop thinking about money.
My experience has been almost the opposite.
I no longer track expenses because I need to restrict every purchase or stay within a rigid monthly budget. I track them because the cost of our actual life is the most important input into every financial-freedom calculation.
Over the last 12 months, our family of four spent approximately ₹14.49 lakh. That works out to an average of around ₹1.21 lakh per month.
Our net worth is approximately ₹10.8 crore, which means our annual expenses are under 1.5% of our net worth. But the percentage is not the most useful part of this exercise. The real value is knowing what our life costs, how that cost is changing and whether our money continues to support the life we want.
Table of Contents
Why I still track expenses after becoming financially independent
Financial independence did not eliminate the need to understand our spending. It changed the reason for understanding it.
During the accumulation phase, someone may track expenses to save more, invest more or escape debt. After work becomes optional, expense tracking serves a different purpose:
- It tells you whether your retirement assumptions resemble your real life.
- It reveals whether lifestyle inflation is quietly changing those assumptions.
- It helps distinguish ordinary inflation from genuine changes in family needs.
- It allows you to make decisions from evidence rather than anxiety.
The goal is not to minimise every category. The goal is to remain conscious of the whole.
Money is supposed to create freedom. Tracking helps ensure that the freedom is durable.
Budgeting and expense tracking are not the same
A conventional budget looks forward. It sets limits and asks, “Can I spend this?”
Expense tracking looks backward. It records what actually happened and asks, “What does our life cost?”
| Budgeting | Expense tracking |
|---|---|
| Plans future spending | Records actual spending |
| Usually sets category limits | Builds awareness of patterns |
| Often focuses on one month | Becomes more useful over longer periods |
| Asks whether a purchase fits | Asks what the overall life costs |
There is nothing inherently wrong with budgeting. It can be essential when cash flow is tight, debt is accumulating or a specific savings target requires firm limits.
But I do not want our family finances to feel like a permanent restriction exercise. I prefer to use the tracker as a mirror rather than a report card.
We observe first. We make adjustments only when the pattern suggests that our spending is no longer aligned with our priorities.
Why one month tells you very little
Our average monthly expense was approximately ₹1.21 lakh, but we did not spend exactly that amount every month.
Some months contain travel, annual payments, school-related costs, medical expenses, repairs or large family purchases. Other months are naturally quiet. Looking at one expensive month may create unnecessary alarm. Looking at one inexpensive month may create false confidence.
A single month is a poor proxy for a life.
I use monthly data for cash-flow awareness, but I use the full annual total for serious life planning. Twelve months captures seasonality and irregular expenses far better than a “normal month” reconstructed from memory.
This distinction matters especially in early retirement. An unrealistically low monthly estimate can make a retirement corpus look safer than it is.
Our real family spending
Our figures need context.
We are a family of four living in Vũng Tàu, Vietnam, with two young children. We own our home, so the total does not include monthly rent. Expenses are tracked locally and converted into Indian rupees to make them understandable for the Indian audience on the Simple Wealth Project.
Over the measured 12-month period:
- Total family expenses: approximately ₹14.49 lakh
- Monthly average: approximately ₹1.21 lakh
- Calendar-year 2025 spending: approximately ₹14.37 lakh
- Current net worth: approximately ₹10.8 crore
- Annual spending as a share of net worth: under 1.5%
These numbers are not a model budget for another family. Housing, education, healthcare, taxes, domestic help and travel vary enormously across cities and countries. Our owned home alone makes a major difference.
The useful question is not whether ₹1.21 lakh is high or low. It is whether the spending is intentional, sustainable and aligned with the family’s priorities.
Expenses are the input to your Enough Number
Net worth is easy to celebrate because it is a large, visible number. Expenses are less exciting, but they determine what that net worth can support.
Using our annual expenses of approximately ₹14.5 lakh:
| Withdrawal multiple | Illustrative Enough Number |
|---|---|
| 25× annual expenses | Approximately ₹3.62 crore |
| 30× annual expenses | Approximately ₹4.35 crore |
| 33× annual expenses | Approximately ₹4.78 crore |
This creates an illustrative range of roughly ₹3.6–4.8 crore.
It is not automatically the final retirement number. A proper calculation must consider asset allocation, taxes, inflation by category, one-time goals, children’s education, healthcare, longevity, future income and the margin of safety a person needs to sleep well.
But the framework exposes something important: without a credible expense number, an Enough Number is built on guesswork.
Why our current withdrawal rate is unusually low
Annual spending of ₹14.49 lakh against a net worth of around ₹10.8 crore is approximately 1.34%.
That is not a standard everyone needs to follow. It is partly a consequence of continuing to earn some income, owning our home, living relatively simply and allowing our invested wealth to keep compounding.
It also does not mean every rupee of net worth is a liquid retirement asset. Net worth can include property and other assets that do not directly fund annual spending. A withdrawal-rate calculation should ideally use the investable portfolio rather than blindly dividing expenses by total net worth.
I still find the net-worth ratio useful as a broad measure of how demanding our lifestyle is relative to everything we have built. I simply do not treat it as a complete retirement model.
Three different reasons expenses rise
Not every increase in spending means that someone has become careless. I separate rising expenses into three types.
1. Price inflation
The same life becomes more expensive. Groceries, rent, healthcare and services cost more even when consumption has not changed.
2. Lifestyle inflation
We choose a more expensive version of life: premium food, a larger home, upgraded travel or more frequent purchases.
3. Life-stage change
The family develops a genuinely different need: school fees, elder care, a new child or more healthcare support.
The distinction matters because each requires a different response.
Price inflation belongs in the financial model. Lifestyle inflation invites a values-based decision. Life-stage change may be necessary and should not be mislabelled as a failure of discipline.
For our family, two young children mean that future spending will not look exactly like the last 12 months. Schooling and other developmental needs can increase even if our underlying lifestyle remains simple.
The simple expense-tracking system I use
The system has four parts.
1. Choose the period
Set the start and end dates. For life planning, aim to collect at least 12 months of data.
2. Record transactions
Add the date, amount and broad category. Most transactions can come from bank and card statements. Track meaningful cash spending rather than trying to reconstruct every tiny purchase perfectly.
3. Review the monthly summary
Look at the trend and composition. The purpose is to notice unusual months and broad changes, not to judge each month in isolation.
4. Use the annual overview
The annual total is the number that matters for your Enough Number, withdrawal-rate scenarios and long-term planning.
The spreadsheet does not need to become a hobby. It only needs to be reliable enough to support decisions and simple enough to continue.
How detailed should expense categories be?
One of the easiest ways to abandon expense tracking is to create too many categories.
I prefer broad groups that answer meaningful questions. A useful structure might include:
- Housing and utilities
- Groceries and food
- Children and education
- Transport
- Healthcare
- Travel and leisure
- Shopping and household purchases
- Other irregular expenses
If splitting one category will not change a decision, the extra detail probably has little value.
The objective is not perfect accounting. It is useful awareness.
What I do not use the tracker for
I do not use it to create guilt around ordinary family spending.
I do not compare every month with an artificially low target.
I do not assume that the cheapest option is always the best option.
I do not optimise away the things that make family life healthier, calmer or more meaningful.
Financial independence should expand the ability to make thoughtful choices. It should not replace one form of pressure with another.
What the numbers have taught me
First, a comfortable family life does not need to expand in proportion to net worth. Our spending is a small fraction of what we own because the things we value most are not necessarily the most expensive.
Second, annual data is calmer than monthly data. It absorbs the noise of travel, repairs and irregular purchases.
Third, tracking creates freedom when it is observational rather than punitive. Knowing the number reduces ambiguity.
Finally, early retirement is not a single finish line. It is an ongoing relationship between money, time, family needs and personal meaning. Expenses are one way of observing whether those parts remain in balance.
A simple way to begin
- Collect the last 12 months of bank and card statements.
- Enter transactions using broad categories.
- Add meaningful cash spending without chasing perfect accuracy.
- Review the monthly pattern.
- Calculate the annual total.
- Use that number in your Enough Number calculation.
I share the free expense tracker and explain how it works alongside the expense-tracking video. Delete the dummy data, add your own transactions and allow the summaries to update automatically.
The simple conclusion
I do not track expenses because I am afraid to spend money.
I track them because I want a clear relationship with money.
Our ₹1.21 lakh monthly average is not a budget another family should copy. It is a description of our life during a particular 12-month period. Its value comes from helping us plan, reflect and decide.
Track enough to understand your life. Use the annual total to calculate what is enough. Then allow the system to support your freedom rather than dominate your attention.
Disclaimer: This article is for education and documents my personal experience. The withdrawal multiples shown are illustrations, not personalised financial advice. Retirement planning should account for taxes, inflation, portfolio composition, future goals and individual circumstances.