Using Excel to Track your Finances

While there are many programs out there to help you manage your finances (Quicken, Money, etc.) as well as websites such as Mint that will essentially track your finances automatically and send you updates, nothing seems to be as effective for me as a simple Excel spreadsheet. I prefer to use Microsoft Excel, but there are other spreadsheet programs available for little or no cost, such as OpenOffice or GoogleDocs, that will give you the same results. By putting your finances on “paper”, it is much easier to set and track goals, as well as to recognize progress or regression you are making in managing your personal finances and spending habits.

An Excel spreadsheet is an easy place to track all of your accounts in one place.  You can create a sheet to track all of the places you do banking and maintain other financial accounts, and include a link to the website, your username, and a password reminder.  You can also include things like your utility company and cell phone provider to ensure that you never miss a payment.  By having all of the accounts listed in one place, you can ensure that you keep up-to-date on your transactions and avoid costly late fees.

One of my tabs is a simple tracker for my car payments.  It allows me to see what I have paid so far, what I have left to pay, and how much interest I am being charged.  Seeing the progress I am making is motivating, and also encourages me to make extra payments, whether $10 or an entire month’s payment, so I can see the balance drop even further.

In following the car payment example, you can do the same type of sheet for credit cards and other loans or debts.  Or if you have a number of debts, it can be useful to put them all on one sheet and show a total of your net worth, including your debt and savings.  I update the balances on the spreadsheet at least every two weeks to get an inventory of where I am at, and as with listing your accounts, it helps to remind you of payments that need to be made.  It also helps reduce spending, as you can see the amounts you spend added to your debt almost immediately.