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How to Track Your Finances (Save More Money and Increase Your Net Worth)

Discussions around how to track your finances every month, how to save more money, and increase your net worth at a quick pace.

How to Track Your Finances (Save More Money and Increase Your Net Worth). Discussions around how to track your finances every month, how to save more money, and increase your net worth at a quick pace.

Tracking Finance

I use the following spreadsheet, and update it every single month to track my finances (discussed in this video as well). If interested, you can download the spreadsheet here.

On the first of the month, I update assets and liabilities, and save off a tab to have historical records of how my net worth has increased over time. I also update my expenses for the past month. By recording these numbers once a month, I've been more conscious and purposeful of ensuring they trend in the direction I want.

I believe this spreadsheet has been one of the number one reasons that I have been able to save more money and increase my net worth at a high rate.

This is the spreadsheet I use monthly to track my finances and:

  • Create a Budget

  • Calculate Net Worth

  • Track Assets and Liabilities (Debt)

  • Track Cash Flow from Savings or Checking Accounts (project minimum amount of cash in the future)

  • Calculate Savings Rate

  • Calculate Debt to Income Ratio (DTI)

  • Calculate Estimated Retirement Age

  • Where to Increase Savings

  • Where to Pay Down Debt vs Invest More to Increase Net Worth

  • Create Printable Summary Reports

  • Graph Net Worth vs Cumulative After Tax Income

  • and more

How to Increase Savings

Automatic Savings

One way to increase your savings is to focus on the amount you automatically save each month, and use what is left over for miscellaneous items, like new clothes, entertainment, going out for food or drinks, etc. This is opposite to what most people do, where they focus on a budgeting out all the small miscellaneous items, and then save what is left over. The issue with the latter is it requires much more willpower, decreasing the probability that you will save that much each month. When you flip it around, and automatically save (by having automatic withdrawals or contributions to separate accounts) the probability of saving money each month becomes 100%.

Separate Account

I also recommend to save your money in a separate account than where you spend your money. For instance, do not save money in the savings account attached to your checking account where you have a debit card to be able to use that money. The reason is out-of-sight, out-of-mind. If you see that extra $1,000 every month in the same account where you use the money to go out to eat or buy other miscellaneous items, the chances are much higher that you will be tempted and end up using at least some portion of that money. It is easier to justify a frivolous purchase when you constantly see that extra amount staring at you. Therefore, instead, save and invest your money in a separate account from where you spend your money throughout the month. This will lead to a higher total amount saved, increasing your net worth as well.

Avoid Lifestyle Inflation

To increase your savings even more, as you receive additional income, increase your automatic contributions. Otherwise, that extra money will slip to expenses. I would assume the majority of people when they receive raises over their lifetime, continually increase their lifestyle (cars, homes, vacations, clothes, etc.). This is fine, and I have done the same. However, I would recommend to keep your lifestyle as constant as possible for as long as possible (and therefore your expenses the same), to allow you to increase savings early in your life, and enjoy the benefits of compounding that money via investing.

How to Increase Your Net Worth

Calculate Your Net Worth

Net worth is assets minus liabilities (or debt). Another name for this is your equity. Think of owning a home. The asset value is the value of the home, and the liability is the amount of debt / mortgage on the property. The difference is your equity, or how much you own of the home. The same can be said for all your assets and liabilities. Record the value of all your assets, add them up, do the same for liabilities, and then take the difference. Knowing your current net worth, and keeping track of it over time, will make it much easier to know whether that number is increasing or decreasing.

How to Track Your Finances (Save More Money and Increase Your Net Worth). Discussions around how to track your finances every month, how to save more money, and increase your net worth at a quick pace.

What Gets Measured Gets Managed

The benefit of tracking this each month (such as in a spreadsheet) is that you can monitor progress, and adjust where necessary. By recording and updating assets and liabilities, you will notice if you are taking on too much debt in certain areas (credit cards, new furniture loan, etc.) and will increase the likelihood of staying on top of paying off those loans, as well as preventing you from increasing your debt any further.

I know when I would update my numbers and see one month where I had spent more than normal and had a higher credit card balance. The new few months, I was more conscious of my spending, and even automatically increased my allocations to investments, knowing I could afford it if I didn't spend as much else where. Without recording it, I may have thought very little of the increases in spending, leading it to stay at that higher level or even increase even more, which would of had a negative effect on my net worth. Instead, by recognizing the increase in debt, and then increasing my investment allocations for all the months going forward, I was able to keep my liabilities lower and increase my asset side, and increase my net worth.

Effective Allocation

To increase your net worth, you can do simple steps such as increase your allocation or contribution to investment / savings accounts to increase the asset side of the balance sheet. You can also pay down debt to decrease the liability side of the balance sheet. More specifically, lets say you have some extra money from a raise, and you are trying to decide where to allocate that extra monthly income. My first thought is to think in terms of the returns I will earn or save on that money, depending on where I put it, and then direct the money where it will earn / save me the most.

For instance, if I have a savings account earning 1%, a car loan with an interest rate of 5%, an IRA where I invest in the S&P 500 index fund and could possibly earn the average return of approximately 7%, or some higher interest debt at a rate of 15%, I would pay off the 15% interest first. Once paid off, I would then add more to my IRA to attempt to earn the 7%. Once the IRA is maxed out, I would pay off the debt on the car (unless I had more room to increase investment allocations and earn more than 5%). Another option, with the extra amounts available in access of the minimum amounts (such as on debt), is to split the extra amounts evenly between two similar returns. Since 5% is guaranteed, and 7% in the market is not, I may do a 50/50 split with the extra amounts. At the end of the day, as long as you are saving that extra amount and investing it, or you are paying down debt, your net worth will increase. But if you put that extra money where it will earn the highest returns (investing) or where you will save the most money (paying off high interest debt), you can increase your net worth.

I believe a reason for having a higher than average net worth is from following this practice of always allocating my money to where it would earn the highest return or save me the most money. For the last several years, the best area has been specific investments. By constantly allocating additional funds towards those investments, I have experienced good returns and some level of compounding on those investments. However, I believe the real benefits of compounding of those additional allocation amounts will come much later in life, and I look forward to see how it develops.


I discuss this and more in the following video.


If you enjoy these short write-ups, and are looking for more details, and in-depth thoughts and analysis, check out my Substack.

-Austin Swanson (Swany407)

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis. Please see the Disclaimer page for more details.

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