Your monthly spend also decides how soon you can retire: Expense tracking apps, AI tools are changing how Indians invest

Most people don’t know where their money goes. They have a rough sense—rent, groceries, a few subscriptions —but the true picture, with all its leakages and blind spots, stays blurry. Personal finance conversations largely revolve around products, which mutual fund to buy, which stock to pick. Financial experts and individuals are discovering that the investment journey often begins much earlier: when individuals first understand how they spend.

Expense-tracking apps, spreadsheets, Artificial Intelligence (AI) -generated analysis, and budgeting dashboards are not merely bookkeeping tools. They reveal recurring patterns, unconscious leakages, and hidden habits that quietly shape longterm wealth outcomes.

A shocking realisation


Chennai resident Paranitharan S. spent 13 years in the Information Technology (IT) field before striking out on his own as a mutual fund distributor four months ago. He has been using an expense tracking app called Spendee since 2017-18, long before he made the leap to self-employment. His reason for starting was simple and deliberate: he wanted to move his monthly Systematic Investment Plan (SIP) from Rs.5,000 to Rs.10,000, and to do that, he first needed to know where his money was going.

“The first thing when you want to start investments is you want to know where your money is going,” says 44-year-old Paranitharan. “I wanted a systematic way to track my spending and understand where my money was going. That’s how it all started.”

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He uses the free version of Spendee, feeding in expenses manually, partly out of habit, partly because he did not want to give a third-party app access to his bank accounts. Every purchase goes in by the end of the day. On the last day of every month, he exports the data to Excel to understand where the money has gone.

The surprises came early. Paranitharan thought he was spending Rs.5,000–6,000 on groceries, but it turned out that he was spending up to Rs.12,000 regularly. Expenses on clothes were high too, much to his surprise. “I never imagined I’d be someone who spent so much on clothes,” he says. Over time, though, the surprises faded. Now, the numbers broadly match his expectations. The clarity is built in.

The impact on his investment behaviour has been material. Before 2017, his investment rate hovered around 10% of income. By 2020, it had climbed to 40-50%. He does not attribute the entire jump to the app; income levels changed too, but he estimates that tracking expenses directly contributed a 5-10% increase in his savings.

That habit proved especially valuable when he decided to quit his job.

Better control of expenses

Anjana Jayalakshmi’s relationship with money has long been shaped by shyness. The 27-year-old senior content consultant from Chennai describes herself as someone who grew up avoiding conversations about money, never asking questions or taking part in financial discussions. She started budgeting when she was 20, through rows and columns in Excel, spending two hours every month trying to assemble a complete picture from her own memory and bank messages. The effort was exhausting, and left gaps.

She discovered GoalSeek, a personal finance app, almost by accident, through a professional project involving the startup, and decided to try it. When she synced her bank account, the picture that emerged was different from anything her Excel sheet had shown her.

“Everything was like a treadmill journey for me. I was always on the run when it came to money, and I didn’t know how to balance it all, because I spent a lot of time and effort just budgeting and writing expenses down.” The app replaced those tedious hours with a pie chart she checks every 15 days. Zomato, Swiggy, movie tickets — the app automatically pulls in her UPI transactions, categorises them, and shows her, at a glance, what the month is looking like.

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On GoalSeek, she has set aside Rs.20-30 lakh for a master’s degree she plans to pursue in five to six years, and a separate goal for a wedding. A feature on the app calculates how much she needs to save each month to hit those targets.

“I’m less overwhelmed when it comes to money, and not shy anymore,” she says. “I don’t overspend, but I don’t underspend too. I take a look at the pie chart, and get an understanding. I believe that one can indulge in a guilty pleasure, and it’s not the end of the world.”

Jayalakshmi has seen almost 50% jump in her investments since she started using the app. Two days before this interview, a friend invited her to an IPL match. She looked at her pie chart, saw the health-related expenses her parents had incurred that month, and declined. It saved her roughly Rs.5,000-6,000. A small decision, made in a moment, because the data was right there.

Anjana Jayalakshmi, 27
Chennai, senior content consultant
Tracking expenses via Excel was exhausting, and left gaps
Impact of expense tracking: 50% jump in investments

Smarter investment journey

Tanvi Taneja, 34, vice-president, marketing, at a Pune-based fintech startup, Famli, has moved beyond dedicated apps. She tried several but found that too many transactions were misclassified or left uncategorised by automated systems. Today, she feeds her monthly bank statements into AI tools to get a fast and accurate breakdown. Her bigger revelation was not about curbing spending but about what all that visibility did to her thinking about investing. “Once I started actively tracking, I started paying more attention to the return I get on all my investments, and to how I can increase that. I saw some unclaimed money in one of my bank accounts, and one of the mutual funds I noticed was not performing well. That helped me in taking the right investment decisions.” The act of watching money naturally led to the question of where it should go.

Paranitharan S., 44
Chennai, self employed
Wanted to raise the share of salary allocated to investments beyond 10%
Impact of expense tracking: Immediate
5-10% increase in investmen

The bigger picture

Jayalakshmi, Paranitharan, and Taneja are not outliers. A survey conducted between August and September 2025 by CGAP, a US-based think tank that promotes financial inclusion, found that 85% of personal finance management (PFM) app users in India reported improvements in their ability to manage their finances because of these tools, with 31% reporting significant improvement. The study released in March 2026 covered 274 PFM users drawn from a national smartphone panel.

The findings align with what Dante De Gori, Chief Executive Officer of FPSB International, has long argued about the psychology of spending. “Tracking and managing expenses is one of the most important foundations of successful investing,” he says.

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When individuals have a clear understanding of where their money is going, they are better positioned to make financial decisions, reduce unnecessary spending, and identify opportunities to invest consistently towards their short-term and long-term goals. “From a behavioural perspective, spending awareness also helps build healthier money habits. It encourages individuals to differentiate between impulsive and purposeful spending, improving financial discipline over time,” says De Gori.

How tracking expenses can help
85% of respondents in a CGAP survey reported improvements in their ability to manage their finances because of personal finance management (PFM) apps

Got slightly worse: 0%, Got much worse: 0%
CGAP survey, conducted between August and September 2025, included 274 screened PFM users.

How to track expenses using excel

STEP 1

Create two separate lists

Monthly fixed expenses

• Rent/EMI
• Groceries
• Utilities
• Internet/mobile bills
• Transport
• Household expenses

Annual/occasional expenses

• Insurance premiums
• School fees
• Festival shopping
• Birthdays/gifts
• Travel/trips home
• Club memberships
• Dining/shopping splurges

STEP 2

Calculate your real monthly expense

• Add up all annual expenses
• Divide the total by 12
• You get the monthly burden of yearly costs

STEP 3

• Keep annual expense money separate
• A separate bank account, or
• A liquid fund

STEP 4

Track spending regularly

Update the Excel/Google Sheet frequently Categorise spending into:

STEP 5

Focus on discretionary leaks Common blind spots include:

• Impulse shopping
• Food delivery
• Festivals
• Birthdays
• Dining out
• Small lifestyle spends

STEP 6

Use AI for spending insights

Upload expense sheet, instead of sharing confidential bank statements:

• Spending breakdowns
• Expense ratios
• Investment vs income analysis
• Category-wise spending patterns

What the apps are seeing

Palak Chauhan, Founder and CEO of GoalSeek, a Sebi-registered investment adviser platform built on the account aggregator framework, tracks spending behaviour across thousands of users in India and says the trends are striking. Quick commerce tops the list of hidden spending. “The amount of money people are spending on quick commerce is mind-boggling. For some people, the frequency is two, four, even five times a day on the same app and what they’re not realising is that even Rs 100, Rs 500 orders quietly add up to RS 10,000-20,000 a month,” she says. Beyond quick commerce, Chauhan says the categories that have grown most visibly over the last two years are dining experiences, flights, vacations, pets and wellness, including salon and grooming. “These categories are increasing by nearly 10-15% year on year, reflecting not just inflation but a broader shift toward lifestyle and experience spending.”

She sees the UPI economy as both an enabler and a complication. “One thing we have heard from everybody is that money is just flowing with UPI. People have no idea where their money is going.”

This near-invisibility of small digital payments is what makes tracking apps so valuable, and so necessary. GoalSeek is also working on a peer benchmarking feature to show users how they compare to others of similar age, income, and city, because, as she notes, spending realities vary enormously across India.

“The moment people can actually see where their money is going, they begin identifying spending leaks almost immediately. We’ve seen users become far more intentional with their money, increase their savings, and start investing more consistently simply because they finally have clarity,” says Chauhan.

On the role of AI, Chauhan is particularly optimistic. “While people may hesitate to ask personal finance questions to their friends or family, they don’t hesitate to ask AI, especially on a finance app. People are asking things like, ‘Should I buy a house right now?’, ‘Can I afford to quit my job?’, ‘Am I saving enough?’ AI responds directly and without judgment.”

The tools are improving, but they are not yet complete. Saikrishna Musunuru, Founder and CEO of Payinstacard, identifies a critical gap: “There is no prediction layer. Most of the apps currently in the market are just tracking your money that has already been spent. There is no prediction layer; it’s not going to predict where you are likely to spend or how much you are likely to incur as an expense, and there are no controls either. So that’s the missing piece I can see.”

Tanvi Taneja, 34
Marketing executive, Pune
Wanted to have a better understanding of expenses
Impact of expense tracking: Helped in taking the right investment decisions

The adviser’s view

Upasana Mondal, a Registered Investment Adviser and founder of DreamBluePrintz, works with clients across the income spectrum and begins every financial plan with a single, often uncomfortable exercise: figuring out what the client actually spends on. “It has a bigger impact than what people assume. Most people are more bothered about where to invest, what returns funds are giving, but it is all linked to how much you are spending in a month, and that will also decide how soon you can retire,” she says. She frequently encounters a revealing discrepancy: clients who estimate their monthly expenses as “somewhere between Rs.1 lakh and Rs.1.5 lakh.” That Rs.50,000 variance, when tracked over a few months, often reveals real money that can be redirected. “Once we’ve done this exercise for a few months and reviewed the expense sheets, we usually find another Rs.10,000–20,000 that can be channelled into an SIP, which is a significant amount,” he says.

For clients wary of sharing banking data with third-party apps, Mondal suggests a simple alternative: track expenses manually in Excel or Google sheets. One list should cover fixed monthly costs like rent and groceries, while another captures annual expenses such as insurance premiums, school fees, birthdays, and festival shopping. Add up yearly costs, divide by 12, and save that amount monthly in a separate account or liquid fund. Once spending data is recorded, AI tools can analyse this or bank statements to generate detailed spending reports, category-wise expense breakdowns, investment-toincome ratios, and insights into personal spending habits without relying entirely on fintech apps.

The first step

Before you can plan where your money goes, you have to see where it is already going. The mechanism, whether an expense tracking app, an Excel sheet, or a bank statement fed into an AI, matters far less than the act itself.

As De Gori of FPSB International puts it: “Even small adjustments in everyday expenses can create meaningful opportunities to build savings and investments through the power of consistency and compounding. Without a proper understanding of expenses, people may struggle to prepare for emergencies, achieve financial goals, or build long-term financial security.”

Knowing where the money goes is not a preliminary step to financial planning. It is the plan.