Starting to track our wealth

You might say that you are not wealthy, that you are not rich, that you don’t have enough.

The fact is that it will never enough. You might always desire something you can’t afford at some point.

The goal here is to treat our money and assets with respect and say to the world that we are serious about managing it and deserving of more.

Setting up the system

If you are a die hard paper person that loves writing things down: Go for it. Build yourself a rock solid system of accounting on paper that you will be disciplined to follow through with.

Me, I know I am messy when writing things down. It won’t work for me.

Are you more of a spreadsheet or Excel kind of person? Go for it. Set yourself up with a system that you fill me meticulous about filling in your finances and be disciplined about it.

Me, I’ve tried the spreadsheet only solution, and I’ve found it hard to follow through, mostly when I don’t feel like sitting down at the computer.

What to track

Everyone has heard about the importance of doing a budget. I’ve found through the years that it is really freaking hard to stick to a budget, and I always end up feeling bad about failing to follow through.

What made me gain more control over my financial life was the tracking of my net worth and its growth. I wanted to see it go up so bad month after month that I unconsciously I was saving money in my behaviours.

In order to track my net worth, I made myself track all my transactions in order to have a clear portrait of my incomes and expenses to analyze what were the causes of my net worth variations, positive or negative. If you want you could also just input you accounts balance at the moment you want to update your net worth, but this will mean that you won’t be able to see why your net worth fluctuated with an easy glimpse at your data.

Transactions

The transactions that you do are what defines your money behaviors. You might have a few transactions a month, but very costly, or a lot that don’t seem to to cost much. The later is the most dangerous. You won’t feel the pain of your actions until you look at your bank account. The first one gives you a better idea of how much of your paycheck you are actually spending. For example, going to costco makes you feel that it is a big expense and that you need to be careful. Going to the groceries and spending 40-50 $ every night might seem like small expenses.

By starting to track every transaction, you will develop your focus on your spending behaviors, and even earning if you earn money differently then a steady paycheck. So when I start building my wealth tracking system, I love to start by structuring how I track my transactions.

For every transaction, I will track the following details:

  • Date of the transaction
  • Amount
  • Account (Credit card, bank account, etc…)
  • Category of spending (Home, Car, etc..)
  • Sub category (Rent, Repair, etc…)
  • Payee (Where it happened) – This way I can avoid places where I lose control monetarily.
  • Description – For when I need more precision, not required
  • Tax related – To track back expenses I need to input in my tax reports at the end of the year (Saves time, and money since we tend to forget some)

Accounts

Tony Robbins teach the psychology of our inner thermostat. Our subconscious will always bring us back to where we are comfortable or what we believe we deserve. Was your life always a straight line with organized expanses and earnings? I’m pretty sure that it ain’t the case.

Now what about your bank accounts? I’m pretty sure they saw their numbers in the high and the lows. In fact, you saw your accounts being in the high numbers or low numbers we’re stress kicked in and survival instinct kicked in as well. But what determines when our accounts are in the high or low numbers is exactly our inner thermostat.

Maybe you feel safe having 100$ in your account on a monday before your pay check. Maybe you feel safe not being able to pay rent on the first when your pay check is on the 3rd. Maybe you feel stress not having 6 months of rent in savings. Maybe you feel stress when your account goes under 1000$.

Same goes with anything. We all have our stress kick in at different moments in life. What level of gas in the car makes you fill it up?

By tracking the balance of your accounts you will be conscious about your thermostat. You will keep it steady. You won’t go and sabotage yourself once it goes higher. You will start to repgrogram your inner thermostat to make that level the new base temperature.

Assets

After bank accounts, our assets are the other thing that affects our net worth. By tracking them, we will balance our net worth properly.

Without tracking assets, you could spend 5000 $ in a month and think you failed. By tracking assets, this 5 thousand spending will reflect in your net worth if it was spent on buying a car. You will then be able to properly monitor your big expenses and know when they are value adding transactions.

Net worth

Once we are tracking our stepping stones defining our wealth portrait, we can start tracking our net worth and that’s where the money game starts.

Let’s say you start today with 3 000$ in the bank and 2 000$ in assets. How great would you feel seeing that in 3 months you were able to grow your net worth by 2 500$? Maybe not much when comparing to others.

But now, what if you saw that you grew your whole net worth by 50%. These are really great returns in investing, and so are they in personal finances.

How to track

Now is your decision to make how you want to track your personal finances, but please, track them.

You can go with Google Sheet and track everything there.

Or you can adapt and build yourself a modern mobile and web application.

Here comes appsheet

I love the ability to own my data and be able to do whatever I want with it. (Spreadsheets or Excel)

I love the ability to be able to access it everywhere in the same way and edit it or get insights on my behaviours, and that’s where appsheet comes in handy.

Appsheet enables you to build an mobile app or browser app on top of your Google sheets. This way you own the data that you put into the app for further uses and you give yourself an easy to use tool to follow through on your wealth tracking.