A Mandatory Exercise in Tracking your Personal Finances




As my income has grown, expenses have declined, and I’ve grown more and more in tune with my personal finances and long-term goals – an interesting and ironic thing has happened.

Time has seemingly slowed WAAAAY down.

In other words, no matter how much I stash away over short periods of times, it seems like my progress is moving in incredibly slow motion. I get antsy, frustrated, and lose my patience that things aren’t growing faster. And until the last few years, I really had no sense of my progress other than that my net worth was increasing over time. How fast and soon? Just vague guesses. This led to further frustration and impatience.

So – I decided to begin tracking my personal finances on a quarterly basis.

Nothing complex. A 10 minute exercise at most. And before you label it as a chore and dismiss it for yourself, I can tell you that I can hardly wait to fill it out every three months. Your line items may differ, but here are mine:

  • tracking your financesIndividual Savings
  • Individual Checking
  • Wife Individual Checking
  • Joint Savings
  • Joint Checking
  • Work Deferred Compensation
  • Money Market Account
  • Investment Broker (non-retirement)
  • Employee Stock Value
  • Total Debt (-)
  • Total Value

I also list out the value of my retirement accounts at that point in time:

  • Roth IRA
  • Traditional IRA
  • Wife Roth IRA
  • Wife Traditional IRA
  • 401K
  • Wife 401K
  • SEP IRA
  • Total Value

The two lists contain line items identical to those listed in my usable net worth calculation model. You’ll notice no housing equity listed, because it’s not usable.

Knowing the total values is great, and a huge step up over not knowing them. But, here’s the real key to making this useful: break out your totals every three months. In other words, don’t replace the old totals with the new – keep them entirely separate. And then slap a date on them.




This allows for, at a minimum, three incredibly useful insights that simply tracking totals will not:

  1. How much you are actually saving (after tax) every three months, every year, and beyond. This could be extremely encouraging or extremely discouraging – but I promise you it will be eye opening and inspiring either way.
  2. At these savings rates, how long will it take you to reach certain financial goals (i.e. a home down payment, paying off loans, retirement).
  3. If you are happy with your progress or not.

Maybe you do something like this already. If not? Consider it mandatory. In fact, if you are not willing to do it, why are you even bothering with anything personal finance related? I kick myself for not starting it sooner than I did (ideally, as soon as I started post-graduate employment). Better late than never.

This exercise has pushed me to another level in personal savings. Unfortunately, it hasn’t grown my patience, but now I can see exactly where I’m at and how long it will take me to get to where I want to go. And that’s huge progress.

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11 Comments

  1. Andro Selvin
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