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Len Penzo dot Com

The offbeat personal finance blog for responsible people.

My State of the Household Report and List of 2015 Expenses

By Len Penzo

calculatorThere are times when one can be too organized; but that isn’t the case when it comes to personal finances.

Forgive me for sounding like a broken record but, when it comes to money management, one of the most important pieces of information anyone can have is a detailed summary of where your household income was spent during the previous year. I’ve been diligently using an Excel spreadsheet for 19 years now to track almost every facet of my household expenses — and that discipline has provided me with extraordinary insight into my short- and long-term household spending patterns.

That insight reveals priceless information about my income and outgo that allows me to optimize my personal finances.

Hopefully, this summary of my household expenses and net worth assessment for 2015 will inspire you to track your expenses with the same rigor — so let’s get started!

The Big Picture

Unless you need to liquidate all your assets, net worth is a relatively unimportant metric when it comes to personal finances — so I only check my net worth once per year. However, by looking at the annual percentage change it is a good indicator of whether or not your personal finances are improving — or possibly taking a turn for the worse.

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Photo Credit: jakeandlindsay

March 11, 2016

Comments

  1. 1

    Dan says

    Good points Len.

    My wife and I started using a spreadsheet to manage expenses about 5 years ago and the sheet we use is not overly complex and I think everyone should have one setup. Even a simple, money available, and “items to pay” that does simple arithmetic helps a lot to instantly see where we stand.

    On the Stacking Benjamins podcast, I remembered hearing the most powerful tool in financial success is to have a basic plan. Some people are missing out on this basic step that disciplines them and keeps the worry/thinking out of achieving financial goals.

    For example, we’ve run an amortization table on our mortgage and broke down how much extra we needed to put on top of the principle every month to pay it off by our 15 year wedding anniversary. The deadline date in our plan that we set was to pay off the house by the anniversary date so we can splurge and go on an expensive vacation. We’re 8 years in and still on track. ; )

    Later.

    • 2

      Len Penzo says

      That’s awesome, Dan!

      With each passing year, you’ll find your spreadsheet will become more and more valuable in helping you plan for the future.

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