I know our net worth, but not what our life costs

After leaving the company that acquired mine, I opened Chase and saw a negative balance in our checking account.

I wasn't out of money. The Printfection sale had left me with money in a taxable investment account that I could transfer. The problem was I had no idea what our life actually cost.

For years, our finances had mostly taken care of themselves. Our paychecks came in. The bills went out. I didn't think much about what we were spending because the checking account kept filling back up.

Without my paycheck coming in, I had to check each month what was left in checking and what was coming due, then transfer enough from the taxable account to cover the gap. At first, the transfers didn't bother me. But after a while, the amount seemed like way too much, even with Megan's income.

I didn't think we were living extravagantly but wasn't paying especially close attention. We did have a full-time nanny and traveled more after the exit.

But some of the money leaving the taxable account wasn't ordinary family spending. It also covered ongoing costs for our mountain lot in Crested Butte, architectural plans for a house, taxes from the sale, and expenses for a small business I'd started.

I couldn't tell if we were spending more, everything had gotten more expensive, or I was mistaking other withdrawals for spending.

It was embarrassing. I'd spent years studying withdrawal rates and building a resilient portfolio. But I hadn't figured out what we were spending or if it had gotten out of hand.

Why I couldn't tell what our life costs

Net worth

I could open Monarch, a personal finance app, and see our net worth right away. It felt good to see that number hadn't changed much.

But net worth answered the wrong question. Money I'd moved from the taxable account into the lot and our kids' college savings accounts still counted toward our net worth, even as the account we depended on kept shrinking.

Taxable account withdrawals

I was starting to worry about how much money was leaving the taxable account. But not all of it was spending.

Some of it made up the difference between Megan's salary and our ordinary spending. A lot of it paid taxes on sale proceeds that had gone into the account but were never really mine to spend. Then there was the lot: property taxes and architectural work for the house we hoped to build. I also put some of it toward my small business.

When I ran Printfection, I never would have treated operating expenses, taxes, buying property, and investing in a new venture as the same thing. But at home, all I had was one vague feeling: we're spending too much.

Spending

I went through our 2024 transactions in Monarch while getting ready for taxes. The total was way higher than I expected.

But I didn't trust it.

The total depended on Monarch bringing in every transaction and me deciding what counted as normal spending.

But Monarch didn't reconcile transactions against our bank and credit card statements. When I checked the statements, I found transactions missing from Monarch. The same transactions were missing from other apps that used Plaid to connect to our accounts. None warned me that anything was wrong.

I still don't want to budget

I've never wanted a budget. Partly because it makes me feel restricted even when we can afford something. Partly because I don't want another system to maintain. I'd rather make decisions as they come than set a spending limit for every category.

But I do need to know how much we spend over a year.

After the sale, it became easier to say yes. The kids were out of school, and we could afford another trip. Why not go?

I bought a boat. I was getting restless in Denver and wanted something adventurous our family could do close to home. It meant paying more than $600 a month for a storage unit. A full-time nanny was incredibly convenient, but it cost at least twice as much as preschool for Ava and after-school care for Liam.

Each choice seemed reasonable on its own. Not knowing what they added up to felt reckless.

I'm not trying to cut everything. I just want to see where the money is going and whether it's worth it.

Seeing all those choices together over a full year would help us decide what to keep and what to cut. We could leave more money invested or spend more weekends skiing as a family. I've never come home wondering if it was worth the money.

I wish I'd understood our spending sooner

Right after the sale, I was anxious to get all that money out of checking and invested. I focused on the portfolio and mostly guessed at what our life cost.

If I'd understood it better, I might have spent less on some things and more confidently on others. That could have changed the portfolio I built or the work I pursued. Maybe I wouldn't have bought land for the mountain home and outdoor life I wanted for our family.

Now I'm doing the boring work I skipped: going back to original statements, reconciling the accounts, and deciding exactly what counts as ordinary spending. Then I can use that definition consistently and see how our spending changes over time.

I put this work off because categorizing transactions felt tedious and I didn't understand why it mattered. I still don't enjoy it but want numbers Megan and I can trust.

I'm figuring it out but still don't know what we spend in a normal year or if the portfolio can keep up.