Does it take you a lot of effort to get an overview of your personal finances? Try using a personal wealth tracker. A strategy that will help you monitor your money, which in turn, can help you reach your financial goals.
In this article, we will go through the main methods to track personal finances and how to track personal wealth.
Main Methods to Track Personal Finances
There are three main ways of keeping track of your personal finances:
Budgeting apps. Different online tools allow for the aggregation of data from different financial accounts to provide an overview of your financial status. These tools have a monthly fee and cannot always connect all your sources of wealth
Wealth tracker spreadsheets. A customizable spreadsheet that allows you to track your wealth over time. This can be created for free or a template can be bought for a one-time cost
Pen and paper. An old-fashioned, yet effective method for those who prefer a hands-on approach without distractions from digital tools
Each method has pros and cons, and the best option depends on your individual preference.
How to Track Personal Wealth
Personal wealth is the combination of your money in different bank accounts and investments in funds, stocks, real estate. Tracking personal wealth over time can help you get a better overview of your financial status, which in turn, will help you make decisions to build wealth over time.
At FAIRUN, we like simplicity. Our suggestion is to start with a simple personal wealth tracker. This can be bought or created by yourself in Google Sheets or Excel. However, it should follow these two simple principles:
Breakdown of main wealth categories by sources. This can be your cash in different bank accounts, investments in securities, and more
Monthly data collection. You should add a reminder in your calendar where you add the data each month. If you have 5 data points, this shouldn’t take more than a few minutes
This allows you to analyze your wealth per month in a finance dashboard.
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