Wealth Building Tools
Monthly Spending Tracker, Retirement Analysis, and Net Worth Statement Template
Monthly Spending Tracker
FYW - Money Spending Tracker.xlsx
Tracking expenses is a bit laborious, but perhaps one of the most important wealth building exercises. If you can, try to update every two-three days so you don't get too far behind. Going through this exercise will allow you to address problem areas in real time. All entries are inputted in tab 2 (monthly entries) and some sample entries are included for illustrative purposes. All you need to do is enter the date, a description of the expense, the amount, and under “category” use the pull down and place each expense in the appropriate category. If you want to change the name of a category (or add a new category) go to tab 1 (Value Statement Summary) and write over the name of the category. This will automatically add a new pull-down category in tab 2. Don’t overthink the categories. If you spend money at Target, just categorize under “household expenses” or any other category that you think makes sense. Don’t feel like you need to go through each item separately. The value of this exercise is all about building awareness on where your money is going.
This tool allows you to understand how much you will need for retirement and what you need to be contributing and investing today on a monthly basis. In the initial example, the assumed annual cash needs in retirement is $60,000 (in today's dollars), this person plans to retire in 35 years, and is starting with an initial value of $0. Given these inputs and assuming a 2.5% inflation rate and 8% annual retirement, they need to save and invest $1,500 per month. If you have a 401(k), this is a great place to start, especially if you have an employer match.
Net Worth Statement Template
This document provides an overview of your financial condition at a specific point in time. Examples are included for illustrative purposes. Just write over them and add more rows if need be. Basically, for assets include anything that you own of value (checking accounts, savings accounts, estimated home values, 401(k), etc.) and for liabilities anything you owe (mortgage, credit card, student loans, etc.).