Using a Spreadsheet to Realize Your Financial Values

This is a guest post from Jaimie of Paid Twice. If you like what you see here, please consider subscribing to her RSS feed.

In this age of electronic everything and increased compatibility across platforms, it’s easy to become detached from our actual spending patterns and behaviors. We download a credit card statement here, a checking account statement there, and zip zap we’ve made a pretty chart with all of our spending and saving broken into nice pie charts and graphs with sums and totals.

The High Cost of Automation

The more I read about different financial management software packages, the more I hear the same questions. Is this compatible with my banking and credit institutions? Can I automatically download all my transactions? But I submit to you that this automatic importing doesn’t give most people a complete understanding of how their financial behavior lines up with the values they hold.

Getting down and dirty with a spreadsheet and manually entering transactions yourself can do wonders for your financial behavior. Indeed, this forces you to consider each purchase you’ve made a second time, and to think about if the money you spent was really how much you wanted to spend for whatever you did.

Choosing instant convenience over manual entry can cloud the real utility of even the best spending plan in figuring out what we value most, and making sure our financial behavior matches our actual values. Open yourself to the idea that using a spending plan that involves manual entry of data could help you meet your goals and realize your dreams faster than you can without one. Having to reconsider each purchase you make and expense you have keeps you in touch with where your money is really going, not just where you think it is going by looking at the sum of all parts.

The Value of Tedium

The entering of receipts can be rather tedious, and it can be a pain to remember to collect them. But that manual reviewing of what you’ve spent and having to enter it gives you a second reflection on how it aligns with your overall values. Yes, 10% of your overall spending for eating out may be a good number as far as your overall values go. But it makes a difference if that 10% was comprised of two special date nights for you and your spouse vs. 18 runs through the drive through because you didn’t feel like cooking.

It’s easy for us in our busy lives to do something and then push it to the back of our mind and not think about it any further. How many times have you forgotten where you put your keys, your glasses, your socks, or anything else you’ve done absent-mindedly? Spending money can be the same way.

I can run out for diapers and somehow pick up four other things and end up spending twice as much without having thought a whole lot about it until I have to manually classify the receipt and what I spent. Then I start to think about if I really needed to spend my miscellaneous money on random grocery store temptations, and the next time I am shopping, I pick up fewer random items and more what I really need. I’ve personally seen my impulse spending while shopping drop from over 10% of my total grocery bill each week to less than 5%, and often 0%, since I began entering my transactions manually and tracking the impulse portion week to week.

My Advice

I’m not advocating giving up the pretty tools and the flowcharts and the graphs by reverting back to pencil and paper. Technology definitely has its place, and can be a real asset of analyzing spending trends. What I am advocating is that you let go of automatic downloading of data, and do the work yourself. Even if you can’t want to be bothered to save receipts (though I recommend doing so), you can still do this by using a copy of your bank and credit card statements and entering the data into your preferred method of financial management manually.

Any cash will have to be accounted for, of course, so some receipt-saving is necessary. The important aspect here is reconsidering every dollar you spend, and making sure that it has been spent in a way that is consistent with your overall values and goals as far as your financial health and future. Those small amounts spent here and there, that with automatic downloading of transactions, you might not even notice, can add up to make a big difference if they were put to use thoughtfully and with purpose.

Give your finances a second look, and you’ll be surprised at what you might find. The resulting readjustment of future spending as you start to really consider where your money goes will bring your spending more in line with your actual values, and free up more of your resources for the things that matter most.

8 Responses to “Using a Spreadsheet to Realize Your Financial Values”

  1. Anonymous

    i agree. Having to manually enter in your items is a pain in the but but it makes me rethinking buying that item. Because the more items i buy the more I have to enter in.

  2. Anonymous

    I used an excel spreadsheet to track my spending. It took so long to enter the information every week(hours to sort receipts,categorize,enter the amounts, verify against statements) that it wore me out and I stopped. Then I realized we use our debit cards for all our purchases and never carry cash so I bought the Quicken software package. In addition, I marked an envelope “Weekly Receipts” into which we drop our receipts for the week. Then every Saturday morning, like clockwork, the first thing I do is download all checking, saving and investment account transactions. I pull out the receipts and match them up with my bank transactions and enter the appropriate categories according to what was spent. And, just like in my former spreadsheet I split out the categories. For instance, groceries has sub-categories such as snacks, meat, fruit/veggies etc. so I know exactly where each dollar went. Only now it goes much faster in Quicken and I can quickly run a report and see exactly how much we spend and where. What’s more I can easily compare it with the same time frame one year ago, or a month ago or whatever and quickly determine what I need to do to adjust. For instance, I learned that last year my second biggest spending category, behind the mortgage, was groceries! Now I monitor our spending weekly and have cut our grocery expenses by two-thirds each month from what they use to be. So I think a financial software package can be used and be just as good as a spreadsheet only faster because the transactions can be downloaded instead of the tedium of having to enter each one. The main thing is that you have to be willing to put in the time and for me, a spreadsheet was too time intensive. Now I have the same information but it takes less then a half an hour every week to get it!

  3. Anonymous

    I absolutely, wholeheartedly disagree. First off we paid $30 for Quicken Deluxe 2007. Best $30 I EVER spent. The value Quicken provides me as the financial planner of the house is having all our banking, credit, and brokerage accounts in one place, and the ability to create charts and graphs based on custom data I provide. Right now it takes me about five minutes to download my transactions, which I do weekly. If I had to do this by hand, it would probably take two hours, and there would no doubt be errors. The problem may lie I think with the people who only download and don’t bother reviewing their statements or comparing their expenses to their expectations.

  4. Anonymous

    I like your article! I find that keeping a spreadsheet of my monthly cash flow plan really cracks the whip on me…and I am really intentional about my spending and money management. It helps me keep an eye on how self-indulgent I’m being. I stay conscious on different costs and what needs to be shopped…like recently, I shopped my auto insurance and it’s 1/3 of what it was.

    For walking-around money (food, gas, entertainment, blow), I use cash envelopes and have a standard amount each pay period that goes into those, and it’s finite. The bonus is that I don’t have to go back and log and classify receipts all the time. The cash allocation is in the budget and I can spend it on that category without thinking twice. It saves quite a bit of labor. Using cash also helps keep me from overspending.

  5. Anonymous

    I like your article Jaimie. I myself always balance my checkbook “offline”. If more people did that, they would realize what they are doing to their financial health.

  6. Anonymous

    Since we use our debit cards for just about all purchases (easiest way to track for us) and I enter all our data into Quicken I am highly motivated not to spend money because I know I’ll have to enter the data at some point.

Leave a Reply