Financial Freedom & Spreadsheets

I have met few people who are financially literate and do not use spreadsheets frequently both in their personal and professional lives. I love spreadsheets and use them to track my day to day expenses, taxes, donations and just about everything.

Just as you can’t run a business without tracking revenue, costs and making projections, I feel it’s reckless not to do the same in your personal life. Because in the end the fundamentals of money are the same. If the expense is higher than the revenue, whether its business or your personal life, the result will be the same.

I recommend everyone to create spreadsheets for their household expenses. This will help you project what your annual spending is going to be like. Once you have your annual expense projection, you can set your income goals accordingly. You can plan savings, project wealth generation and eventually plan retirement. It all starts with a spreadsheet.

My monthly expense sheet layout is very basic and does the job for me.

Financial freedom is often misunderstood as people equate it to really high salaries. Most middle class people who start working by 25 can retire by the latest at 40. I’m not kidding. It is the only truth I know, and without any generalization. For now, how about you simply track and ensure that you’re earning more and spending less and once you’ve done that, you can head over to MMM to learn how the rest works.