How One Page Simplified My Financial Life

It doesn't necessarily take a lot to simply your financial life. Sometimes just a single page on a spreadsheet is enough to put plenty of clarity to your overall financial situation. And while you may already have a good idea of where your assets and liabilities are and in what amounts, until you actually see them listed on a sheet of paper or a computer screen, your overall financial picture might not hit home quite the same.

I've been using a simple, one page Excel spreadsheet -- not an intricate Internet application that requires you to enter personal information, link to various accounts, and then spits out all sorts of pretty pictures and cool looking graphics -- to gauge my personal finances for nearly ten years now. It is super simple, doesn't take much time at all to update, and it provides me with my family's financial situation at a glance.

Everything You Need

Having a general breakdown of all your relevant financial information in one central location can be like a weight lifted from your shoulders. It's so nice not have had to dig for account passbooks, sort through stacks of retirement plan statements, and pilfer through bank statements.

For security purposes, I don't list actual account numbers on my spreadsheet, preferring generalized names with associated totals instead. For my page, I list things like bank account balances, retirement accounts, stock/bond totals, home principal estimate (reducing the total amount by sales commission, closing costs, etc. for a more accurate perspective), and any debt balances (i.e. credit cards, personal loans, bank loans, etc.) for our family. I even include my four-year-old son's savings account balance to make him feel like a part of the family financial team.

A One and Done Update

I probably spend five minutes, several times a month updating my spreadsheet. Remember, this isn't a way to break down expenses, develop a budget or form other intricate financial details of my life. This is simply an easy way to track my overall financial progress and get a quick snapshot of assets and liabilities. I list assets first, liabilities next, which results in an overall balance of net worth. Pretty simple, right?

That's why such a spreadsheet is so great and is so easy to use. At the end of the month, after our house payment is applied, retirement accounts are updated, and other financial information is processed, I update my spreadsheet for the month. I then make a copy of it, create a new tab in Excel, and start a new month. This allows me to watch and track my progress month-over-month and throughout the years.

Quick, Clean, Simple, and Safe

While this method of keeping tabs on my personal finances is relatively straight forward and to the point, there are things to consider. As I mentioned, I don't list personal information such as account numbers in the event my computer is ever compromised or stolen. I also use a password to protect the spreadsheet, not so much because I need it; it just makes me feel a little better. And yes, I once accidentally deleted the entire spreadsheet completely from my hard drive and lost several years of data, so I now have an extra copy that I backup every several months or so that I keep on a zip drive in a secure location in case of fire, theft or idiotic mistake.

Over the years, I've also added little side elements to my single page such as outstanding payments due or receivables (since I'm self-employed), as well as an estimation of social security benefits section that I update yearly. Other than this, my form has remained relatively the same over the previous decade. It just goes to show that things don't always have to be overly complex to be useful when it comes to money.

More From This Contributor:

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Valuable Financial Lessons from Mom and Dad

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Disclaimer:

The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute legal or financial advice. For financial advice, readers should consult a licensed financial advisor. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.