Why you cannot skip this step
This is the part people want to skip. I get it — auditing your spending sounds unglamorous compared to picking index funds or optimizing a Roth ladder. But here is the brutal arithmetic of FI: your FI number is your annual spending times 25. Every dollar that silently leaks out of your life raises the target by $25. A $500/month subscription trail you never noticed is not a $500/month problem. It is a $150,000 problem, because that is how much additional portfolio you now need to sustain it.
But it compounds in the other direction too. For every $100 per month you cut from your expenses, your FI number drops by $30,000. And that same $100, invested over 20 years, grows to about $60,000. Add those together and a single $100/month leak is a $90,000 swing in your financial life. Little things matter. Anyone who tells you they do not simply has not done the math.
This is why Brad puts it this way: unless you are actively auditing, you are leaking your financial future.
And you cannot out-earn this. I know, because I tried. It is demonstrably, mathematically, “look around at the economy” provably impossible to simply make more money faster than unexamined lifestyle creep can spend it. The people who reach FI are not the ones who earn the most — they are the ones who know exactly what their lives cost and have made peace with those numbers.
A community member named Josh nailed it: it is like clearing out the junk drawer. It is not a one and done exercise. Things drift into disorder. That is just entropy. Over a year or two or five, expenses accumulate — a free trial that auto-renewed, a subscription you forgot about, a service that raised its price. None of them feel like a decision. That is exactly why the audit exists.
Put differently: you cannot have an FI number without knowing what your life costs. Everything else is guessing.