Tracking your personal finances is a powerful exercise. It creates financial awareness and you can start making strategic long-term decisions for your money management. Whether your goal is to become rich or simply to get more control of your financial situation, tracking your net worth will support you along the way.
In this blog post, we will explain how you can efficiently manage your personal finances with a net worth tracker spreadsheet.
Keep it simple
First of all, you should start with a simple personal wealth tracker.
Do not get too ambitious right away. Tracking your money can quickly become something very complicated. You do not want to lose yourself in details or spending too much time on it.
It is much better to start off with a setup that you will actually follow. This can be achieved with a simple net worth tracker spreadsheet in Google Sheets or Excel. It should be easy-to-use, yet comprehensive.
You can always expand your money management later.
Setup of your personal wealth tracker
Start by creating an overview of your different sources of personal wealth. For instance, your different banks and Robinhood accounts. This will become the infrastructure of your net worth tracker spreadsheet.
Then you should label the different types of personal assets. For instance, cash, mutual funds and stocks. The labels should be based on your preferred level of depth within your analyses.
Here you need to find a good balance for you. The more labels, the more time-consuming the tracking will become. However, the more labels, the more depth of analysis you will have. There is not right or wrong answer, but make sure that your data collection process remains efficient.
How to track your money
Set up a system for how to track your money. We recommend adding the data to your personal wealth tracker once per month. You should add the current status for the different data sources within your setup.
Best-practice is to set up a calendar reminder once per month for adding the data. This ensures that you enter the data at the same frequency every month, making the data more reliable for month-over-month analysis.
The data collection should be very easy and not require more than a few minutes to execute upon.
Analyze your data
When the infrastructure is set up and you have established a good process for how to track your money, then you are ready to start analyzing your data. This can best be done in a personal wealth dashboard.
Here you can easily adjust your analysis for different time periods, sources of wealth and type of assets.
Read more on this topic here: Manage Your Personal Finances with These Timeless Strategies and How to Build Wealth When You Don’t Come from Money
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