After almost 10 years as a financial planner, I’ve found the best way to keep track of my money is still a simple spreadsheet

wealthy couple drink champagne

Money can be unruly.

But in order to reach your goals, you have to control the chaos. One of the easiest ways to keep track of your financial progress is to monitor your net worth: everything you own minus everything you owe.

Think of it like taking a photo of yourself every day for years — eventually, you’ll be able to look back and see how things have changed. No matter where you start, your net worth is likely to get better over time.

As a financial planner in New York City, one of the first tasks I ask my clients to complete is their “current financial snapshot,” an overview of every aspect of their financial situation, including account balances. Once you can see all of your money in one place, you can start figuring out what you want to do with it. Added bonus: Getting organized frees up brain space so you don’t have to think about money nearly as much.

It probably comes as no surprise that I love tracking money. But I’m not alone. I’ve found that once clients get organized, most of them love it too.

I started tracking my expenses in college, using a small blue notebook the New York Times once wrote about. A few years later, I automated the process by linking all of my financial accounts to Mint, which I recommend clients do as well.

And then, in April 2009, one month after the stock market hit its lowest point during the financial crisis, I started tracking my net worth. That was over eight years ago, and I still update the same simple spreadsheet every month. I use Mint’s monthly summary emails to help make the process even easier.

Here’s how I do it:

I log my current net worth on the first day of every month. For example:

The spreadsheet I use has four main columns:

• Date

• Net worth (the combined total of investments and cash balances, minus any debt)

• Investments total (any money that is invested, whether in a 401(k), IRA, or other retirement account, as well as taxable investment accounts)

• Cash total (all checking and savings accounts)

I also calculate the percent change since the last month for each of the three categories. The formula I use is:

• Percent change = (This month – Last month)/This month

• For example: =(B3-B2)/B2

This allows me to see trends, and serves as a way to see how much I’m saving and what returns I am earning from month-to-month.

To get the numbers, I use Mint’s monthly summary email, which usually arrives on the first day of the month.

One of the most helpful parts about using a spreadsheet to track your net worth is creating a chart to visualize the growth over time.

The longer you keep track of your net worth, the more you’ll be able to visualize your progress over time. I created a chart tracking net worth by date on a separate tab in my spreadsheet. This is a far easier way to see how your money is growing over time.

It’s important to note your net worth will not go up in a straight, pretty line. It will be jagged, and some months your net worth may decrease a bit — if you made a big purchase or if the stock market goes down.

Over time, however, your net worth will go up. Keeping track of it could serve as positive reinforcement, or at least a helpful reminder that spending less than you earn is worth it.

You can partially automate the process by requesting monthly summary emails from your account aggregator of choice.

You don’t have to use Mint, but it’s the account aggregator I prefer. If you don’t already have a Mint account, you’ll have to create one in order to receive monthly summary emails.

Once you link your checking, savings, retirement, and investment accounts, Mint will keep track of the balances, as well as your transactions.

To sign up for emails, go to “settings” and select “notifications.” The first option you’ll see is for summary emails, which can be sent weekly, monthly, or never. I recommend receiving it monthly — weekly is too often, and never is … well, not very helpful.

Every month, Mint will send you an email detailing all of your account balances. At the top of the email, you’ll see your overall net worth (taking into account any debt you owe) with the label “Your Money.”

It also shows the balances for all of your cash accounts and your investment accounts, organized into separate sections. It doesn’t provide a total for each category, so you will have to add those up before logging the amount on your spreadsheet.

See the rest of the story at INSIDER


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