Thursday, August 6, 2026

Linear Regression Comes to Your Financial Rescue || 3 Amazing Linear Regression Financial Use Cases

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AMAZING LINEAR REGRESSION FINANCIAL USE CASES

Monthly expenses growth
Estimated home loan closure date
Estimated portfolio growth in "Current Value (in INR)" per day.

I was getting great ideas on how to name it and one such name was: Linear Regression Comes to Your Financial Rescue :D

You can find the code and data (original and unmasked) in my GitHub Repo. 

But here let's take a look at the findings:

I: Monthly expenses growth

Visual...

Note the spikes in the chart around 2022-23: these were times I made lumpsum payments towards real estate and renovation.

Excel Formula to Crunch The Numbers...

"Ignoring unusually large expenses (₹300,000 or more), how quickly are my monthly expenses increasing or decreasing over time?"

**Filter out rows with expenses exceeding 3L
Robust trend (with filter and without logs):
=ROUND(SLOPE(FILTER(C2:C200,C2:C200<300000),FILTER(B2:B200,C2:C200<300000)),3)

And this number stands out at: 1111.386
Meaning my monthly expenses are increasing at a rate of ₹1,111.39 per month (on average) over the last 5+ years.

II: Estimated Home Loan Closure Date

Loan Repayment Trend Line as of March 23, 2026

Loan Repayment Trend Line as of August 6, 2026

Date	Slope (balance change per day)	Intercept	Estimated Loan Completion Date
2026-MAR-23	-715.21	4881572.37	2041-03-27
2026-AUG-06	-713.91	4880959.87	2041-04-07

III: Investment Growth

Drops in Current Value
(1): Note the drop around mid of 2025: That was when I repaid my car loan.
(2): And the drop around mid of 2026: That was when I repaid my personal loan.

And the good news is...
My portfolio is growing at a rate of ₹936 per day (on average) over the last 2-or-so years. 
** As per the old and wise Owl named 'Linear Regression' **

And let me admit: rather having much to do with mathematical modeling, all three of these use cases have got an awful lot to do with financial discipline with money and patience to watch the numbers move tiny bit after weeks, months and years of data accumulation.

Tags: Machine Learning,Investment,Regression,
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