{"id":14307,"date":"2025-04-21T04:15:55","date_gmt":"2025-04-21T11:15:55","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=14307"},"modified":"2025-04-27T11:18:55","modified_gmt":"2025-04-27T18:18:55","slug":"why-i-prefer-a-spreadsheet-to-track-expenses-manage-my-finances-3","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id14307-why-i-prefer-a-spreadsheet-to-track-expenses-manage-my-finances-3.html","title":{"rendered":"Why I Prefer a Spreadsheet to Track Expenses & Manage My Finances"},"content":{"rendered":"

\"spreadsheet<\/a>I admit it; I still use a spreadsheet to track expenses. In fact, I’ve been diligently managing my personal finances<\/a> and tracking household expenses for almost 30 years.<\/p>\n

How diligent, you ask?<\/p>\n

Well, I can tell you that my cable bill in February 1998 was $8.03, and that I spent $141.16 in 2006 for an annual subscription to the Los Angeles Times<\/em>.<\/p>\n

I can also verify with total certainty that 7% of my income in 2007 went towards groceries, and vouch that I spent $88.95 at my local K-Mart in August 2001. Just don’t ask me what for, because I’m not that thorough with my record keeping.<\/p>\n

Why Tracking Expenses Is Important<\/h3>\n

Taking the time to track and analyze your income and where it’s going is a crucial element of managing your personal finances. That’s because doing so uncovers hidden money leaks<\/a> that help you better allocate your resources, thereby ensuring you always get the most out your paycheck.<\/p>\n

It makes it easier to set financial goals too.<\/p>\n

Of course, prior to tracking your expenses, you have to record them.<\/p>\n

While not impossible, trying to track all your cash purchases can be extremely tedious and time-consuming. On the other hand, everything purchased on your credit and debit cards are automatically recorded and available for review online or as part of your monthly billing statements – which is why I use credit cards<\/a> for as much as I possibly can.<\/p>\n

As for keeping tabs on how you spend your money, there are a panoply of options available.<\/p>\n

Now I realize many people are initially attracted to sites like Mint\u00a0and MyBudget-Online because their automation features essentially make the job of tracking your money almost effortless. The trouble is, in the world of personal finance I believe too much automation can be a curse. That’s because when money management tools become too user-friendly, a lot of folks have very little incentive to understand the data being made available to them.<\/p>\n

For the financially undisciplined, over time that’s a surefire recipe for failure.<\/p>\n

The Big Advantage of Spreadsheets<\/h3>\n

For me, the more old-school hands-on approach is the only way to go; I use my own custom-designed Excel spreadsheet because it forces me to actively manage my personal finances. It also gives me more control than using a web-based site like Mint.<\/p>\n

True, a spreadsheet is not as sexy as automated money-tracking web-based applications, but it’s the same tried-and-true method I’ve been successfully using to track my income, net worth and expenses for more than 20 years now.<\/p>\n

Here’s a just a small portion of the Excel worksheet for my household expenses from 1999:<\/p>\n

\"\"<\/a>

Click on figure to enlarge it.<\/p><\/div>\n

Although the custom Excel spreadsheet I developed was quite simple in the beginning, it has grown in detail and complexity over the years, with pie charts and graphs that clearly show the results of our household spending and current trending patterns.<\/p>\n

Today, my spreadsheet breaks out our household expenses into 13 major categories and 50 subcategories. The major categories include:<\/p>\n