Thursday, January 15, 2015

Behold My Cashflow Spreadsheet

Somebody buy me this.
There are nerds, and then there are NERDS. I'm the all-caps kind.

Exhibit A: One of the things I'm proudest of in life is my budget/cashflow spreadsheet. No, I'm not exaggerating. It is honestly one of the crowning achievements of my 40 years on this planet so far.

Normal people may fly by the seat of their pants, do math in their heads, write things out in their checkbooks or use a program like Quicken to keep their finances in order. Not me. At the end of 1998, I began putting all of my income and expenses into Excel. Back then, and for several years afterward, I just kept a simple two-column tab for each year, tracking everything I made and spent on a monthly basis. I think I tried Quicken once during that time, but quickly abandoned it because my spreadsheet was better.

As time went on, I started getting fancy. I began to project how much I'd have at the end of the year based on past spending. I'd have a starting template for each month that included my estimated income (based on my usual paychecks) and recurring expenses (rent checks, utility bills, student loan payments, typical ATM withdrawals per month), and then I added in a few rows for general categories like "Misc," "Condo projects," "Vacations," "Charity donations," etc. It was a budget, yes, but it also allowed me to tinker with "what if?" scenarios and see how, say, splurging on a big trip in March and not spending as much on clothes in the fall would affect how much I'd have left for Christmas gifts.

It was really exciting (only to me) once I had to factor in my husband's accounts after we got married. For whatever reason, I split the spreadsheet into two sets of income and expense columns. I think it was because at that point in time we had separate accounts and it was the easiest and quickest way to pull all of his data in. But then I kept the format like that long after we'd merged everything.

Here's a snapshot of April 2010:

Shock and awe.

I've x'd out certain amounts, but the color-coding remains. I use other colors throughout the year for different things, but in this screen-capture the orange is for my freelancing income and expenses (I have another spreadsheet that's solely dedicated to my LLC, of course) and green is for tax-related stuff.

Somebody get me this shirt, too.One reason I've been trying (and so far, succeeding) to post here every weekday since I kicked my 2015 goals into gear is that doing so makes me a better writer overall. But sometimes unexpected benefits come out of it, like the fact that I JUST NOW realized—a full 11.5 years after my husband and I got married—that my split-screen format makes no sense and is adding unnecessary work onto my plate.

So now I have something else to look forward to besides Jo and Paul's visit: I get to completely restructure my beloved spreadsheet for the first time in over a decade. I better make sure I'm stocked on goodies and wine, 'cause it's gonna be a big, multi-night project. Woo-hoo!

But in all of this so far I haven't actually disclosed why I love this spreadsheet so much and why I'm so proud of it. Here are the two main reasons:

1) Looking forward. I am a planner. I am also a worrier. This spreadsheet helps me both plan more and worry less. If I lose a source of freelancing income, I can adjust the spreadsheet quickly and see how the rest of the calendar year's finances are affected. If our roof suddenly starts leaking and we need to shell out $10,000 we hadn't planned on to fix it, I can figure out where we can cut back to make up for the loss. I'll know at any given point in time how much is in each of our liquid accounts and when I might need to transfer funds around. It is awesome.

It's no puzzle at all, actually.2) Looking back. We are what we spend money on. It's true. In general, my memory sucks, but if I flip through my spreadsheet I will almost immediately recall what was going on during any given month. It's captured the story of my life since 1999. For example, in August of 1999 there's an entry for "IPO." Ah, yes... I was at a start-up and stupidly never cashed out of any of my stock options, becoming the only person who made zero money during the bubble. In April 2000 there are charges in Tokyo, Sydney, Paris... that was my around-the-world research trip for that same start-up, during which the bubble finally burst. Forward to Summer 2002, there are gifts for some of my best friends' weddings. August 2003, buying the house we still live in. Even the smallest things are memorialized, like the fact I went to a play entitled 'Frodo-a-Go-Go" twelve years ago. You get the picture. EVERYTHING in my life is captured in this spreadsheet.

And so my husband will continue to shake his head at me and my crazy Excel file. And others will try to convince me that personal finance software has come a long way since the late '90s and I really need to check it out. And sometimes even I will doubt the sanity of my little project. But I know I will keep the spreadsheet going as long as I can still type. You can have your NASCAR, your professional wrestling, your reality TV, your B-movies, your sports obsessions, your fast food. My spreadsheet is my guilty pleasure.

- e


Annie Logue said...

Yes! Yes! Yes! I was just explaining my cash flow spreadsheet on Freelance Success. It's simple, but it lets me know what is due when so that I can figure out how much I need to market and how much I can kick back.

Julie said...

I use Excel, too! My business is corporate/executive lodging and I love to track revenue and occupancy. I have the spreadsheet THEN I insert a line chart that overlaps current to previous years by month. Schwing! As soon as I get a booking, I yelp, "Got to update my spreadsheets!"

Seriously, it's a great tool (the line charts are good because I'm a super visual person) and lets me track my progress, and makes me kick my own butt when business slows.

I use Quicken for the rest of my business, but confess that my real loves are my spreadsheets. :)