We don’t track our spending. That means we don’t budget. I hate paperwork; it’s just another item to procrastinate on, right up there with the laundry. So, I haven’t made a budget. I tell myself I will do it. Some day. Soon…

In the world of the FIRE crowd (Financial Independence, Retire Early), this is likely considered one of the ultimate sins. Honestly, if there were such a thing as a “FIRE audit,” I would likely score a D or lower. If you’ve come here specifically for disciplined FIRE advice, I am likely not your best choice. Somehow, I have managed to become “Accidentally FIRE” even with all of my mistakes (shout out to the Accidental FIRE blog ).

I never really wanted to worry about a budget. To me, if I had to count every cent I spend, it would mean I don’t have enough to set aside to do what I want, when I want. But there is a catch: like many retirees, I don’t really know what I want—what I really, really want to do once I am fully retired.

Without a vision of the “what,” deciding on the “how much” remains fuzzy. If you just want to explore different things in retirement, it’s difficult to nail down a spending budget. Maybe I’m that RV guy traveling the country. Or maybe I’m a Dead Head (if that is still a thing), or perhaps a Swiftie. If it’s the latter, I better make the “pile” a lot bigger for those ticket prices.

Spending is likely one of the three legs of a stool for a good retirement—with health and social connection being the other two. The 4% rule basically suggests you can safely withdraw 4% of your money if at least 50% is invested in equities. Another simpler way to look at it, for those who prefer less math, is that you need 25 times your yearly expenses before you pull the trigger.

That is the rub—and my specific problem. I don’t actually know my spending.

How did I arrive at my “magic number” if I don’t know how much we spend? I made some assumptions on what I think we want to spend, and then I added the engineering  “factor of safety” to make my target number significantly bigger. In the end, I decided I didn’t really need a precise spending number because I just planned to over-save.

Truthfully, I was aiming for a nest egg that would put us closer to a 3% withdrawal rule (or less) based on my assumptions. I was “really, really, really” over-saving, truth be told. In the back of my mind, I know we have enough for ourselves. 

However, I admit we will likely end up helping our kids’ generation more than our own generation was helped. When Padme and I purchased our current house, it cost about 1.5x our gross salary. Today, assuming my kids had similar jobs to ours, that same house is now 5x what they and their partner’s gross pay would be.

I know we will help them when the time comes, so we are essentially adding to the nest egg for that purpose. With two kids, that requires a lot more saving. Yes, “first-world problems,” I know. No I can not adopt anyone

With Padme’s pension, we always had a foundation to build upon for our spending. It was likely the foundation, the walls, and the roof trusses. The longer she worked, the more that metaphorical house was being finished. The savings were just to finish off the roof and fill the house with “wants.”

But. A big BUT. Based on my post from a week ago, Padme’s pension may now be potentially smaller and locked up for ten years. The “sweat” is starting to form on my forehead. Now, I actually want to know the real spending number since the math needs to be tighter.

A few years back, I tried to perform some “forensics” on what we spent in a year. Our accounts were not set up to do this well, and I struggled to see where the money went. From that forensic exercise, I came up with a number that was 25% larger than I had estimated in my assumptions at the time.

It caused me to panic momentarily, but the panic faded as we kept adding to the pile with no defined end-date in place. The “nest egg” number did move in my mind that day by about 20%. It was likely the first time I moved the goalposts.

We are now six months away from hitting that new number if we both keep working. If I use that “not-so-accurate” number from two years ago and apply the 4% rule, we could both still retire today. I would just need to shift my thinking on how we spend down our retirement accounts before her pension becomes available. It just takes some of that margin of safety away.

Based on current assumptions, we still have enough buffer for me to retire. We are likely in the 3.25% to 3.5% range versus where I thought we would be. That assumes neither one of us wants to work—and Padme actually does, just at something different once she takes a potential break.

But. But. But. Both of us could be out in the next six to nine months. I don’t think I could comfortably leave if I don’t do this exercise to make sure my spending number is accurate. After a few years of high inflation, are we still spending what I think we are? Likely not.

And with both kids still in high school, we don’t know what the college bills will be. My friends tell me kids no longer get one degree—it’s normally two.

I have to stop talking to those friends.

Truthfully, I knew I had to do this spending audit for real, and I was just waiting for this year to do it. There is no time like the present. So, “Bad Vader,” get your act together. Or the FIRE tribe may turn you into a pile of ash (or laundry).

And laundry, much like paperwork, is another thing I am not fond of. Unless, of course…