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I have a Google Sheet that looks like this (just an example, not actual data)

Date     | Spent | Earned | Category
07.03.15 |  $15  |        |  lunch
07.03.15 |       |  $100  |  sell

So it is very basic stuff. But this is the first time I got interested in money like this. I write every single change on it about all my money with categories about my spending on food, living etc. and earnings like paycheck, sold items even "found on street".

I already calculate: average food spending by categories by thismonth, thisyear and all time. Also I calculate my average income and spending by thismonth, thisyear, all time

So I get it I can calculate sum and average to all categories if I want. I do this because it is fun to do, but I have no idea what else I can get from a simple table like this.

My question is: Is there more to this? Or this is way too simple to know more about my money? What insight I can get from this?

I do not need very deep explanation just keywords so I can learn myself.

Ákos Nikházy
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    I keep the same kind of spreadsheet in conjunction with my girlfriend. I'll tell you what we use it for, we are in the range of 25-30 years old. We calculate how much money we can use to invest and what kind of house we can afford to buy, how much time we can spend without a salary on our current living standard, prepare on "where do we cut off" if emergency situations arises, balance our expenses (i owe X money to her, she owes Y to me, at year end), making trends between years (it's our third consecutive year we are doing this, you get cool insights!). – Massimo May 24 '17 at 11:09
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    Another thing that comes to mind is: knowing so much about your expenses and trends, makes you more sensible on the price of things. Knowing that the brand new smartphone or the house rent costs 10% or 90% of your savings this month helps you make better decisions in general. One word of advice, if I may: try not to go too much into details on your expenses, you'll get bored soon and stop doing this awesome work you are doing! – Massimo May 24 '17 at 11:12
  • @Massimo This is exactly what I was interested in. I could write formulas for stuff like this. Percentage of income is a very good idea too. I will make a column that shows what percentage is given item of the income. I didn't even think about percentage up until now.... I just got interested in stuff like this now. This really helps. – Ákos Nikházy May 24 '17 at 11:18

3 Answers3

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The real question is what can you NOT do! If you track all your monetary actions, you know everything about your monetary situation. That means you have the tools to ask and answer "what if" questions, such as:

  1. "If I get a 10% raise, could I take longer vacations?" You could calculate how much you spend per day on vacation and then consider the amount of your raise and how much of it you'd need to allocate to vacations to, say, be able to take a two-week vacation instead of a one-week vacation.

  2. "How much more would I have to earn to move to this nicer apartment?" This may seem like a simple question, but a surprising number of people can't answer it in a reliable way, because they don't have a clear understanding of how much money they make and how much of it they can afford to spend on housing. If you find you have lots of spare income, maybe you can move to the nicer place right away; if not, at least you can get a sense of how much more money you'd need to make it happen.

  3. "If I started taking the bus to work, how much would I save?" You can look at how much you spend on gas and compare that to the price of a bus pass. By separating out categories like gas, repairs, and car insurance, you can also calculate different scenarios, like if you still kept your car but only used it for occasional trips, versus if you sold the car and used only public transportation.

  4. "If I want to take a trip to Tahiti, what can I cut back on to save the money?" Using your table you can pencil out scenarios like "Suppose I stop eating out for lunch at work and just bring my lunch, how long would I have to do that to save enough to pay for a plane ticket?"

These are just a few random examples. The general idea is that with a record of hard numbers, you can start to consider potential tradeoffs in an objective way --- that is, you can ask "how much in category X would I have to give up to gain this thing I want in category Y?"

The real trick in making use of your data is not so much "what" you can do, but "how" exactly to do it. You may have to become more of a spreadsheet wizard to really delve into these questions. Also, if you have programming expertise, you can even use something like Python to do calculations that might be laborious in a spreadsheet.

BrenBarn
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You can make your table more useful by adding more columns like this:

Date     |             Spent               |     Earned      | Comment
         | Rest  | Groc.  | Bar    | Car   | Job    | Sell   |
07.03.15 |  $15  |        |        |       |        |        | Subway
07.03.15 |       |        |        |       |        | $100   | Sold couch

This makes it really easy to keep track of categories of spending. You just sum a column to get all of your restaurant spending.

minou
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  • Well this makes a lot of sense. I might convert it like this. This way it will be more simple to write formulas for averaging and summing too different categories. – Ákos Nikházy May 24 '17 at 13:21
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    One suggestion would be to have each of your raw data as a single row and use a pivot table or other tool to summarize into columns. The way you have it now you'll have much more unneeded space the more columns you add, and spreadsheets with even dozens of columns can get unwieldy. – D Stanley May 24 '17 at 13:28
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    I recommend against this. It is better to have one column called "category" than to have separate columns for each category. The latter becomes impractical as you add more categories. – BrenBarn May 26 '17 at 18:07
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such analysis helps you keep track of the percentage of income that you

  1. spend,

  2. save, and

  3. invest

    You could apply 1:1:1 ratio. i.e spend 1/3, save 1/3 and invest 1/3.

Hope that helps

Community
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gnsr
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