I have been creating budget worksheets in Excel since I learned how to use it. Every time I read another story about someone’s debt payoff journey, and they offer a free budget worksheet, I quickly download it and plug all my numbers in all over again. Sometimes I just like the different colors and line item headings, mostly I just like playing with the numbers over and over. Maybe I am hoping they will change by magic . . .
In the end I go back to my original Excel sheet because I have tailored it so perfectly over the last 7 years with my formulas and formatting it just feels . . . complete. So when I first heard people mention Personal Capitol as a tool that provides a complete picture of their finances, I really wasn’t that impressed. My budget workbook has multiple pages and they are all linked together. I can look at different scenarios of renting versus buying, increasing or decreasing my savings percentages, and how my expenses change as each of my teens finishes another year of college.
I had always thought Personal Capital cost money to use, so when I saw a link to try it for free, I decided to go ahead and try. It took me about 30 minutes to link all my accounts – and then something crazy happened – up popped my Net Worth:
Can I tell you I was in total shock? Which probably doesn’t make sense to you. Afterall, it didn’t really make sense to me. I mean, I am on this road to pay off massive debt, so intuitively you would think my net worth would not be great even if it were a positive number. So the negative number staring back at me from the screen was definitely to be expected lol. I checked back often over the next three days, just in case they had omitted something. And each time I logged in . . . negative!
But here is why that negative net worth is awesome.
First, it’s showing me where I have been – all those articles about the lack of emergency fund savings of most Americans is pretty frightening. There was a time not too long ago when I was among the group that didn’t even have $400 to cover a small unexpected bill. Now I have an online savings account and the real time updates provided by Personal Capitol are a reminder of how much has changed. Without that account, my assets category would certainly be closer to zero.
Secondly, because Personal Capitol is pulling in my bank transactions, it highlights my current spending patterns and cash flow. It shows me that aside from my regular paychecks twice a month, I am constantly spending money daily until the next paycheck. And by providing me with a total financial picture on one page, it gives me an unbiased look at how far I am from my savings, retirement, and debt payoff goals.
Third, its showing me where I am going. I can pretty accurately predict my spending next month and even next year because I have concrete numbers based on the expenses that show in my accounts. What Personal Capital does is give me a better understanding of the retirement shortfall, between what I want to spend monthly and the more likely monthly income based on my current savings rate. I have a clearer picture of just how much more I need to save annually for retirement in order to be comfortable.
Fourth its turned out to be additional motivation for me. I mean, lets face it - no one wants to be negative. Every time I log in and see that number I am forced to spend time evaluating it. I play with different categories to see what will get me to zero as quickly as possible.
The graph of my negative cash flow is powerful as a deterrent to spending money. Until I find solid ways to bring in additional income, I do not want to do anything that will cause that line to dip further and further below zero.
Sometimes we can get in our own way, be stuck in what we think has worked for us for so long. Even though paper and pencil is still a solid method for budgeting your money and tracking your spending, there are also other resources you can use to keep that information accessible for whenever you need it.
I will probably check in with Personal Capital once a week, just because it’s super easy to use. Even if you are like me, still juggling between paying down huge amounts of debt, while trying to save and invest, the numbers may not move much between visits but just seeing the totals will motivate you to keep going.
What other budget and savings trackers do you use?