How To Organize Your Finances

I’m a very detail oriented person.  I love numbers, spreadsheets and of course money. For my entire adult life I have organized my money using spreadsheets. When I got my first job in 2004 I started a spreadsheet to keep track of my income.  In 2005 I started a net worth tracking spreadsheet. I even have some of my better spreadsheets, like my tax planning spreadsheet and retirement planning spreadsheet available for download.  Recently I have come to the realization that self made spreadsheets are not the best tool for net worth tracking and managing my money across several accounts.  Every quarter I have been logging in to each account I have, finding the balances, entering them into my spreadsheet and updating the graphs I have.  I recently started using a new tool, Personal Capital, which makes organizing my finances quite a bit easier.

I signed up for Personal Capital and within 15 minutes had all of my accounts linked to it and a chart showed me my total net worth immediately.   There are three main reasons why I am using Personal Capital that combined will organize my finances much better than what I am currently doing.

Personal Capital 11. All of my accounts are in one spot: This is a big help.  Logging in to all of my separate accounts and having to add up a tally across them is time consuming and requires me to then into the information into a spreadsheet to track a chart out of how things are going.  With Personal Capital all of my accounts are right there.  One login and the very first page shows me my total net worth on the right side of the page with a nice graph and an account breakdown on the left hand side of the page.

Personal Capital 22. All of my bank accounts are entered together: This goes hand in hand with the point above, but for a different reason.  Mrs. C. and I have separate bank accounts and I actually have two bank accounts that I use.  Personal Capital links all of these accounts together and shows the income and expenses across all the bank accounts as a whole.  My weak point in finances is tracking my expenses. We are both relatively frugal people, but I have never been good at tracking expenses; I think that Personal Capital will help me a ton with this.  Originally I was concerned when I signed up for Personal Capital because it was also including our children’s bank accounts in the total, since they are linked to Mrs. C.’s bank account. Thankfully, Personal Capital makes it very easy to remove any accounts like this from the totals.

Personal Capital 33. Asset Allocation: Because Mrs. C. and I have Roth IRAs, Traditional IRAs, an HSA and a 401K, keeping an optimal asset allocation and rebalancing is extremely difficult.  With Personal Capital linking all of the accounts I get an intutive chart displaying where we have our money.  This makes it easier to know which assets I need to rebalance. Note, the chart on the left here shows that I have 10% of my investments in cash,which by my age group is certainly overly conservative. This cash is actually part of my Health Savings Account and is used for everyday medical expenses, This is a roughly fixed dollar amount and as our balances grow this percent will drop.

I plan to still use my original spreadsheets to track my net worth as well, but now it will only require one login and 5 minutes to update the information, instead of hours.  Personal Capital is already saving me time and is showing me in great detail where my spending is occurring, which is a big help.  Personal Capital is an excellent free tool to organize your finances.

Have you tried Personal Capital? What has your experience been like?

John C. started Action Economics in 2013 as a way to gain more knowledge on personal financial planning and to share that knowledge with others. Action Economics focuses on paying off the house, reducing taxes, and building wealth. John uses the free tool Personal Capital to track his net worth and posts quarterly updates on his finances. Check out the Action Economics archives section for all past posts.

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