I've never kept a diary for myself or my characters, but I think it can be a good idea. I have a standard party of three humans (Paladin, Ranger, Cleric) and three elves (two fighter/magic users and a fighter/magic user/thief). I started them at first level, but saved them to different folders within a Gallery directory based upon their experience level at the time. (0, 10k, 24k, 40k, etc., all the way up to near max) Their equipment varies greatly, having been acquired in different adventuring worlds. Some of the higher level versions are actually equipped rather poorly, considering their experience level. The variants in the Realm subdirectory have a much more standard progression.
Regardless of level or equipment, they're still my squad. They have personalities, and the occasional quirk, but never let such things interfere with a mission. They can heal, cure, protect, rescue, and provide shelter and sustenance to others, but realize their survival depends upon being highly skilled professional killers. If they were otherwise, I'd have replaced them long ago. (Although since they're imaginary characters I built to specs, they never had much of an option.)