The Miser’s 3 Things:
- Pick a night every week that you can spend 15 minutes holding yourself financially accountable. The Miser chose Fridays. Laugh all you want.
- Track your income and spending for that week, and use an Excel spreadsheet or money app to document it. You can also keep tabs on your net worth.
- Tracking your spending keeps you on pace to meet your monthly budget. And tracking your net worth allows you to create and work toward long-term goals.
The DJ’s music reverberated around the club. People were dancing to the beat.
And The Millennial Miser was at home, working on his budget.
Friday night is the time I’ve set aside to spend 15 minutes on financial accountability: tracking my spending and net worth, plus paying off my credit card balance and any bills I may have. I call it Friday Night Budget Night.
Yes, my Friday nights are a bit different than many people’s. The Miser isn’t much for loud music and crazy clubs.
Of course, if you’re one to enjoy socializing on Friday nights, you can do Friday Night Budget Night on any night of the week. The fact that you’re doing it at all — especially on a consistent, weekly basis — is what’s key.
So turn on your laptop, make a playlist with these 15 songs about money (thanks, Billboard), and let’s get to work.
How to track your budget
There are a whole bunch of smartphone apps that will help you track your budget. An Excel spreadsheet also works great, if you’re handy with those (this is what I use).
In an earlier post, I explained how I estimate my monthly expenses at the start of every year. Those go in a column down the left side of my spreadsheet, broken out by each spending category.
This includes the necessities: rent, utilities, groceries, gas, insurance, work-related expenses, and medical. It also includes the wants: TV streaming, eating at restaurants, entertainment, travel, and gifts.
Every Friday night, I go through my credit card purchases (yes, credit card — to get the cash back) and itemize my spending for the previous week into each of the categories. While I’m looking at credit card purchases, I pay off my balance, too. It’s a two-for-one task.
If I’ve bought anything with cash or check during the week, I make a little note of those purchases so I’ll remember to include them on Friday Night Budget Night.
By tracking my spending throughout the month, I can see where my money’s going and where I might need to cut back to meet my budget.
The best part about Excel is that it’ll add up the columns for you, so you can easily total up your spending for the month. As I explained in my 2017 year-end post, you can total up your spending for the year in late December this same way.
Don’t forget to track your income too, so you can see how much you came out ahead — hopefully not behind — for the month. This isn’t just what you earned at your main job; if you have side gigs or other money coming in, track it.
Total time: 10 minutes
How to track net worth
Once I’ve tracked my budget, I move on to the “net worth” tab I’ve created in the same Excel file. Here’s net worth explained:
Assets – Liabilities = Net Worth
- Assets: checking and savings accounts, CDs, investments, retirement accounts
- Liabilities: any outstanding loans (including student loans, car loans, mortgages, personal loans), credit card debt
Technically, your physical assets like vehicles and other items would be included in your net worth, but I want to keep my statistics as simple as possible (and not have to worry about depreciation of things like my car), so I stick to monetary assets.
To track net worth, I log on to my bank and investment accounts, look for the value of each account, and put it into my net worth spreadsheet. You can make tabs on your internet browser to make this go faster.
A word of caution: some financial advisers will tell you not to look at your investment accounts so often because you’ll see the effects of every little dip in the market. Here’s my take: If you’ll be affected by seeing these dips and think you’ll want to pull your money out every time this happens, don’t look as often. Once a month would be better, or maybe track your other assets weekly and your investment accounts every three months (quarterly).
I’ve got a long view of the market, so weekly spikes and dips don’t get me too emotional. If you’re like me, keep track weekly.
Total time: 5 minutes
Why track net worth at all?
For one, I get joy in seeing my numbers rise over time. It’s also important to see if I’m on track to meet my goals: maintaining a six-month emergency fund, having an account that’s growing at a pace to pay for my next car in cash, and contributing to a target-date investment fund that I’ll probably use for a down payment on a house within the next 10 years.
The Excel file takes a little time to set up at first — you’ve got to enter each of your spending categories into your budget spreadsheet, and each of your accounts into your net worth spreadsheet.
Once you’ve done that, the weekly tracking takes 15 minutes tops. That’s 15 minutes to improve your financial health.
Heck, you could even go to the club after you’re done. Suggest a money-themed song to the DJ for The Miser, please.
Top photo from Pexels.com