“What gets measured gets improved” is one of my personal mantras, and in net worth it applies more critically than anything else. It sounds crazy when I put it in writing, but in July of 2016, my family and I passed one million dollars in total net worth. Today, I’m thrilled to be sharing with you the spreadsheet that helped us reach this milestone!
You can certainly argue that the ongoing asset bubble, fueled by low interest rates, is what catapulted us into the three-comma club. But frankly had we not been tracking our finances closely there’s no way we would have even known where our net worth stood.
We made some good decisions (we made some bad ones too). The best decision we made was to buy an apartment in New York City in the summer of 2011. Prices were still low after the financial crisis. When we sold that apartment a few years later, we made a significant profit. When that wire transfer cleared at closing, and with our daughter all of a sudden a full-blown toddler, it hit me that it was time to get serious about our finances.
Part of that epiphany stemmed from “discovering” the Bogleheads forum when I was looking for advice about what to do with the proceeds from the sale. I decided to stay away from an online net worth service and started my own spreadsheet to keep track of things. This was the best thing I ever did. And now I’m really excited to share a public version of that spreadsheet with you!
My Ultimate Family Finances Spreadsheet includes four different, but equally important, tabs:
Cash Flow: essentially your checkbook, which you will balance yourself, in real-time, as often or as infrequently as you like (but hopefully often!). This sheet will also calculate your after-tax stock, bond, and cash savings on a percentage of total savings basis so you can keep track of your preferred asset allocation.
Credit Cards: I have always struggled staying on top of my credit cards. I created this tab to do just that – tracking balances, current credit limits, annual interest rate, utilization, and payment and expense budgets. While I’m not perfect at paying my balance every month, this tab has made a huge difference for me in keeping my overall utilization rates low (this is a critical factor in your credit score) and budgeting monthly payments to different cards. The tab is set up with three hypothetical cards with different balances and limits to get you started.
Net Worth: I started tracking my family’s net worth in early 2015 and, less than two years later, we crossed the $1 million mark. It’s likely we wouldn’t have had a clue where our net worth stood if we weren’t paying close attention to it. This tab in our spreadsheet is also filled in with dummy data that you will obviously update with your current details.
Monthly Savings Budget: As I’ve written here before at Dollar Barrister, I do not track every penny going out the door. (I tried it for a month and it slowly drove me insane.) Instead, I shoot to save 40% of our post-tax income, and track total dollars saved and that percentage on a monthly basis using this tab on my spreadsheet. That monthly percentage is also broken out by taxable bond, stock, and cash investments so I can observe trends in asset allocation over time.
You may be asking yourself why I built a spreadsheet myself instead of just signing up for Mint, Personal Capital, or any of the other online budgeting and savings tools that are out there. Here’s my answer.
I actually did use Mint a while back and frankly I found it overwhelming. Certain of my accounts never connected properly and I didn’t find the budgeting “insights” all that valuable. For me, instead, keeping it simple, and controlling the data points myself has made me much more focused on our family’s bottom line, and created a real difference for us in our financial life.
Now, that’s not to say I might not try Personal Capital or give Mint another shot at some point – continuous improvement is the name of the game – but I’m really happy with the results I’ve achieved using my spreadsheet, and I think you will be too!
You can purchase the Ultimate Family Finances Spreadsheet over in the Dollar Barrister shop for just $25!
Each tab includes a text box with further instructions and, as always, feel free to contact me with any questions or comments on the spreadsheet.