Why Use Excel For Your Finances?


Last week I spoke about Getting Ahead. In that post, I mentioned self-help personal finance books. They have a lot of good ideas in them but if you are not in a position to implement any of them, then what is the use?

So many of these books talk about ideas and how to buy their books full of their ideas but seldom do they include the steps it takes to get out of situations we find ourselves in. I will come back to goal setting in a later post but wanted to talk about the different software’s out there for personal finance.

There are so many personal finance software’s out there that it is hard to list them all. Lots of people have heard of Money, Quicken, Turbo Tax and others. Personally, I do not use any of them. Instead I use Microsoft Excel. Why? Read on…


I started using Microsoft Excel years ago to keep track of my finances. There was a very simple reason for it. Most businesses use Microsoft Office Suite on their computers. I also had Microsoft Office on my home PC. Using Excel allowed me to keep my finances on a jump drive and access it anywhere I went. If I used other software, I could only use a computer that contained that software.

Doing this requires gaining some knowledge of Excel in order to create simple formulas to keep track of totals, etc. Maybe it does not have all the bells and whistles that other software packages have but if you learn some of these simple formulas, you can set up some pretty impressive spreadsheets.

I’m not really interested in super fancy spreadsheets. I like simple. It’s easy for me to figure it out and when the time comes that I need more sophisticated software, I should be in a position to purchase that software or have someone else help take care of my finances.


Below is an example of a simple spreadsheet to track my spending. The names of the locations and amounts have been changed as this is just an example but it shows what is going on.


The first thing that needs to happen when taking control of personal finances is keeping track of where we spend our money. Without this first critical step, there is no way that we will be able to effectively and efficiently get rid of the debt we want to get rid of. The above spreadsheet is by no means a complete list of spending but hopefully it gives an idea of what is going on.

You will notice that the green line at the bottom shows the total for each month while the right most column shows the totals for each location.

Most of us will not spend the specific amounts listed in the spreadsheet at one time so there needs to be a way to total up all the spending that goes on in a given month.

Setting A Formula To A Cell

For our example, we will be looking at the Misc – Walgreen cell with the value of $32.00. What happens if we go to Walgreens one day and spend $32.00 but three days later, we go back and spend another $12.00? We need to be able to add the $12.00 to the existing $32.00 that is already in the cell.

We are using pretty simple formulas for cells like this. In this case, we simply click on the cell and enter the information as follows:


Once we enter this information, we simply press the enter key. The amount that shows in the cell now will be $44.00. If we need to enter even more information, we simply double-click on the cell and add another + with the amount. The key is to make sure that all the information is between the parenthesis.

Setting the Cell to Show Accounting

By default, Excel cells display text. I tend to use the accounting setting for numbers when I am working with currency. It adds the $ to the left side of the cell with the dollar amounts to the right side of the same cell. To do this, right-click on the cell you want to change and select “Format Cells…”

A dialog box appears. Select Accounting as shown below and then press ok. The cell is now formatted for currency.


Next Steps

Now that the spreadsheet is set up, the most important thing we can do is document our spending. Typically, I sit down every evening and enter what I have spent each day into the spreadsheet. Doing this allows me to see, over time, where my money is going. I am also able to see where I am wasting money.

This is the first step in gaining control of our finances. If we do not know where our money is going then how are we supposed to change any bad habits we have? It is also important to list every place you spend money no matter how small the amount is. A penny saved is a penny earned.

It takes a bit of dedication to fill the spreadsheet out each day but it is worth it. Give it a try.

Eat What You Buy; Buy What You Eat

Food, Food, Everywhere and Not a Bite to Eat

Years ago, I had a habit of going through the cupboards and throwing out the food that had the potential for killing my family because it had been expired for so long. Same thing happened with the refrigerator.

There were so many things that no one was eating and they were being purchased out of habit. At one point, we had ten boxes of brownies. Not that there is anything wrong with brownies. They just always seemed to make it in the basket when we were at the store.

Bag after bag of chips and cookies. Jell-o seemed to be a big thing too. Even though we rarely made it except possibly around the holidays.

The List

Finally, after wasting I don’t know how much money buying food no one was eating anyway, I decided to make a change.

I sat down with all the kids and asked them to make a list of all the food they would eat. Such a simple idea and it worked out well.

Each of the kids and I sat down and wrote our own list, then it was combined. It was surprising that most of the items on the list were the same for each of us. The items that were different were small enough that they could be picked up for each person as an extra.

Combining the list, I was able to produce a shopping list that satisfied everyone and most importantly, saved a ton of money by not buying the things no one was eating anyway.

Be a Good Steward

This next part did not happen right away but when the financial situation started to get better, we added another feature to our grocery shopping. Each week we would add $10.00 to the shopping list and labeled it “Others.”

By “Others” I am referring to other people who might not be as well off as we were. The kids were the ones to pick out the items for the “Others.” I made some small parameters for it. The first was that it had to be dried goods, cans or jars.

What was really cool about it was that it taught the kids how to find some real bargains with that $10.00.

The other restrictions included stuff like no candy – but fruit snacks were ok.  All in all, they did a good job researching the items. Soup mixes, pasta, dried spaghetti sauce mix, drink mix, and I could go on with the list. It was good healthy stuff. Made me proud.


Here is a challenge for you. Create a list based on the things your family will eat. Have each person write their own list and then combine it. See how much you can save by using the list. One more thing. Only buy the stuff you put on the list. Nothing extra. What we found was that if someone had to go a week without something, then they learned real quick to make sure those items made it to the list.

Do you have a method you use for figuring out your shopping list? Let’s hear it.

Getting Ahead

Buying Assets

Sometimes I go down rabbit holes looking at information. Most recently, I went down the hole about how to make my money work for me. No, I’m not looking to a “get rich quick” scheme. I just look at my 401k and other savings and wonder if there will be enough for me to retire one day.

With this mindset, I went wandering around the web looking for stuff. I know a lot of people have heard of Robert Kiyosaki. If not, he is known for some of his personal finance books. One of the more popular books he has is his first book Rich Dad, Poor Dad. I actually like many of the things he talks about. I have read several of his books.

Robert Kiyosaki - Rich Dad, Poor Dad

Robert Kiyosaki – Rich Dad, Poor Dad

During my wandering lately, I watched a video of one of his talks. He talks about buying assets. He defines an asset as something that puts money in your pocket whether you are working or not. Makes sense. I listened to the talk and found it helpful.

He defines a liability as anything that takes money out of your pocket whether you are working or not. For most of us, that would include our house and our car. Actually, it probably applies to everyone who has either one or both.

Then I started thinking about how things were when I was first divorced in 2002. I was going crazy just trying to pay the bills. Never mind investing. I had no interest in investing at the time. I was trying hard just to hang on to my house and make sure the needs of my kids were being taken care of.

But I’m Broke

Being broke is no fun. I’ve been broke for longer than I care to think about in my lifetime. Things are better now but there were many years where it was touch and go. When I hear someone say something like “buy assets” and I’m still wondering how I am supposed to pay the electric bill this month, I tend to ignore the person. There is a place for that discussion but it may not be right now.

There is this thing called “Maslow’s Hierarchy of Needs.” It looks like this:

Maslow's Hierarchy of Needs

Maslow’s Hierarchy of Needs

Credit: simplypsychology.org

Basically, it says that if you cannot provide for your basic needs – food, clothing, shelter, etc. then nothing above that really matters as much.

I’ve talked about Wants and Needs before and as you will notice, I include transportation in that list of basic needs no matter what form that transportation takes. Those are the first things I am going to take care of. So if I am wondering how I am going to pay the electric this month, then “buying assets” falls off the list really quickly.

Meeting Basic Needs

I must meet my basic needs before I can look ahead. This will be a continuous theme in the blog over time and I will discuss some ways to do that. Here is the basic idea.

Hopefully, we can all make an income. Sometimes I question that about myself being on disability but things will improve in the next couple of years. Anyway, if our bills are more than our income, there are only a few ways we can get ahead.

The first way is to make more money. How do you do that? We either get a higher paying job, work overtime to get extra income, or take on a second job. We can also temporarily get our hands on extra cash by selling some of the things we have accumulated that we are rarely using anymore. Why have it if we aren’t using it – right? Works in theory. My wife and I are still WAY too attached to our stuff.

The second way is to reduce your expenses. What does that mean? Well, I will list a few extreme methods as well as some more practical ways to do this. We could move to a smaller house with less rent or mortgage, drive a cheaper car, eliminate some of those things that we really do not need such as cable TV, the Internet (although you would not be reading this right now if you did not have that), go from two cars to one car, shop with a list, and I could go on. Maybe in another post.

The third way is to combine the first and second options. We can make more money while reducing our expenses. It does not necessarily mean that our lives will get better right away but maybe the path will be a bit shorter than doing just one or the other.

The bottom line is that when we look around us, there are a lot of things we can live without. Don’t worry though. If we get our finances in order, we can get some of those nice things back later.

I like Robert’s stuff. I really do. Once we get things in order, buying assets, things that put money in your pocket, is a great idea and hopefully, we can do that soon. In the meantime, we need to work on meeting our needs and reducing our expenses.

My challenge for you is how many ways can you think of that would help reduce your expenses so that you can meet all the needs you have? I have listed a few. Let’s hear some of your ideas.