Thursday, June 14, 2012

Tools for Tracking Our Finances

The other day, my mother made the mistake of showing me the utility tracking notebook she keeps. After five minutes of me opening up various spreadsheets of my own creation on my laptop she said, “I shouldn’t even open my mouth, should I?”

That’s because I love spreadsheets, and I find them extremely helpful for all kinds of aspects in my life…especially financial aspects. I use them in a variety of personal and financial aspects of my life. They help me watch where my money is going, in what amounts, and help me to make wiser decisions as to where and how I’m using that money.

I was able to track things like our mortgage payments (with an interest/principal breakdown), extra mortgage payments applied to principle, property taxes, homeowners insurance, repairs and maintenance, and miscellaneous items with my “Home” spreadsheet.

This allowed me to gauge my annual expenses when it came to homeownership, as well as know to the penny, just how much money our home was costing us. I could also determine our profit/loss (which was most certainly a loss) after closing costs and realtor commission when we sold.

Having a spreadsheet to gauge both income and expenses is a great way for me to track my financial progress over time. I can watch how much I earn and how much I spend on a monthly and yearly basis. This can be extremely beneficial when it comes to looking for ways to cut costs, areas in which I might increase my income, year-over-year progress, and personal inflation rates.

Net Worth
I like knowing where my assets and liabilities lay and in what amounts. Being able to determine how my investments are doing, whether they’re advancing or declining, the interest rates they are earning, and what percentage of my portfolio they comprise at a moment’s notice makes my financial life easier and quicker to evaluate on a regular basis. Just one page -- copied and continued each following month -- is enough to give me an overall picture of where I’m standing financially and how my overall net worth has performed in relation to previous months.

Amazingly, my utility tracking may have been my most valuable of all my spreadsheets. Following our natural gas, electric, water/sewer/garbage, cable, Internet, and phone usage over a multi-year period, helped me find ways to cut costs in these areas and reduce our consumption and waste. It also made for some interesting article topics over the years since I’ve been able to come to certain conclusions regarding our consumption and figure out how to adjust our rates and save money accordingly.

Retirement, Moving…and More!
Recently I used a spreadsheet to plan our cross-country move. I used it to budget for our trip, budget for costs upon arrival to our new location, list items that needed to go into storage, plan which items would be sold in a garage sale, and calculate costs that helped us decide whether it would be cheaper to move ourselves or pay a professional.

Even more recently, I’ve used a spreadsheet to come up with a retirement plan for my mother that figures her expenses, income, and assets. I am even using a spreadsheet to plan our upcoming vacation and Christmas costs and budgets.

Spreadsheets are just an integral part of my life, one that helps me stay organized, save money, and make my life more efficient, effective and economical.

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