Track your spending and find your real FIRE number

By Tom, CPA · Updated October 25, 2026

TL;DR: Your FIRE number is only as good as your spending estimate. Pull 12 months of actual transactions, add irregular and future costs (health insurance, taxes, car replacement), subtract costs that disappear, then multiply by 25 or a more conservative multiple.

Educational only, not tax, legal, or investment advice. Examples are illustrations, not predictions. Rules and limits change; verify current figures and talk to a qualified professional about your situation.

Ask someone what they spend in a year and they'll usually give a number that is wonderfully round, impressively confident, and wrong by somewhere between 15% and “I forgot we have a dog.” This isn't a character flaw. Humans remember monthly bills and forget everything else.

Your FIRE number is a multiple of your spending, so every dollar of error gets multiplied by 25. Forget $3,000 a year of irregular costs and your target is $75,000 too low. Let's not do that.

CPA Warning Label: Tracking spending may reveal subscriptions you didn't know you had. Some may be for services you have never once used. Please remain calm.

Step 1: pull records, not memories

Download 12 months of transactions from every checking account and credit card. Twelve months matters: it captures annual insurance premiums, holidays, property taxes and that one time the car made a noise.

You can use an app, a spreadsheet, or a pencil and grim determination. The tool doesn't matter. The completeness does.

Watch for double counting

Credit card payments from checking aren't spending; the individual card charges are. Transfers to savings or investment accounts aren't spending either. An accountant's habit helps here: every transaction should land in exactly one category.

Step 2: categorize (lightly)

Ten to fifteen categories is plenty. More than that and you'll spend your retirement categorizing. A useful set:

• Housing (rent or mortgage, property tax, insurance, HOA, maintenance)
• Utilities and phone
• Food (groceries and eating out separately, if you're brave)
• Transportation (payments, fuel, insurance, repairs)
• Health care (premiums, out-of-pocket)
• Insurance (life, umbrella, other)
• Kids and pets
• Travel and fun
• Giving
• Subscriptions and memberships
• Irregular and one-off
• Taxes (we'll come back to these)

Step 3: find the hidden annual costs

Look for costs that don't show up every month but absolutely show up: car replacement, roof and appliance replacement, gifts, travel, professional fees, and medical surprises. Convert each to an annual amount.

Illustration: replacing a $30,000 car every 10 years is about $3,000 a year. A $15,000 roof every 25 years is about $600 a year. Those two items alone add $90,000 to a FIRE number at 25×. Lavish Larry thought his car would last forever. It did not.

Step 4: adjust for retirement

Your retirement budget isn't your current budget. Make a column for each adjustment.

Costs that may go away

• Retirement contributions and payroll taxes on wages.
• Commuting, work clothes, some convenience spending.
• A mortgage, if it'll be paid off by then.
• Kids' costs, if they'll be grown (if they believe they'll be grown is another question).

Costs that may appear or grow

• Health insurance. If your employer pays most of your premium now, this can be the biggest new line. Read Health insurance before Medicare.
• Income taxes on withdrawals. Depends on your account mix. See FIRE and taxes.
• Travel and hobbies. Free time is free; filling it often isn't.
• Home maintenance you used to ignore because you were never home.

Step 5: compute the number

Worked illustration for a hypothetical household:

Notice the gap between the “I spend about $58,000” number ($1,450,000 at 25×) and the honest one. That's $325,000 of difference at 25×. The extra rows aren't pessimism. They're bookkeeping.

Step 6: keep it alive

Revisit the estimate once a year. A quick monthly glance at totals is enough to catch drift. Our personal cash-flow statement template makes this a 20-minute task.

About the latte

Popular finance advice loves to blame small daily purchases. To be fair: $15 a day is $5,475 a year, about $136,875 of FIRE number at 25×. It isn't nothing. But housing, transport and insurance decisions are usually much larger, and you only have to make them once. Skip the latte if you don't love it. Keep it if you do, and cut something you don't care about instead. Value-based spending beats guilt-based spending, and it's far more sustainable.

The categories everyone forgets (a hall of shame)

Most spending trackers capture the monthly stuff beautifully and then get blindsided by the expenses that show up once a year wearing a fake mustache. Before you trust your number, check for these repeat offenders:

• Annual subscriptions and memberships. Warehouse clubs, software, streaming bundles you forgot you upgraded. Pull 12 months of card statements, not one.
• Car replacement. Even if your car is paid off, it will die eventually, out of spite. A $30,000 car every 10 years is about $3,000 a year.
• Home maintenance. A common rule of thumb is 1% to 2% of the home's value per year. Roofs and water heaters do not care about your spreadsheet.
• Gifts, holidays and weddings. Small individually, surprisingly large in total.
• Medical out-of-pocket costs. Deductibles, dental, glasses. Your future self will need all three.

The fix is a “sinking fund” line for each: divide the expected cost by the years between occurrences and add it to your annual budget. That $3,000 car line is $75,000 of FIRE number at 25×, which is exactly why it matters.

Accrual thinking, for non-accountants

Accountants call this matching expenses to the period they benefit. Everyone else calls it “not pretending the roof is free until it leaks.” Once you smooth lumpy costs into annual amounts, your spending stops looking like a seismograph and starts looking like a number you can plan a retirement around. Plug it into the FIRE number calculator and see whether you like what it says. (You might not. That's the point.)

What to do this week

1. Download 12 months of transactions from every account and card.
2. Total them into 10 to 15 categories and add hidden annual costs.
3. Make the retirement-adjustment columns, then plug the result into the FIRE number calculator.

The bottom line

A FIRE number built on real records, with hidden and future costs added, is a number you can trust. A FIRE number built on vibes is a very expensive guess.

This article is general education and not advice. The cast (Captain Compound, Frugal Fran, Lavish Larry, Doctor Drawdown) is fictional, and so are the example households. Your numbers will differ.