Hi everyone,
On this subreddit, money comes up all the time and there are always questions about how to budget, what to do with one’s money and how to track all this.
I created a (pretty basic) template for people to get started with controlling their own finances and would like to show you how I use it.
# The Google Sheets Template
Here is the template I created:
* 🇬🇧 [English Template](https://docs.google.com/spreadsheets/d/1YtdVyIP-iCqFENGm2JO8EQypAjJlcznHphWz49bc1R8/edit?usp=sharing)
* 🇩🇪 [German Template](https://docs.google.com/spreadsheets/d/1rmdu9mSXj56stJcRReWCNXL1YE7wyfk2Aoh1niAKXNc/edit?usp=sharing)
To start, read the first sheet “Overview” and fill in your data in the “Config” sheet. Then just look at the other Sheets and start to crunch the numbers.
If you are just here for the template, great! But if you are interested in how I use the template and how I generally handle my finances, read on below:
# Why knowing your finances is important
Money is a topic that you will have to deal with for your whole life, so a few years ago I wanted to “get it” and implement a system for how I deal with money as early as possible. I see it as a kind of investment, where for each year that I have figured out my finances, I am less stressed and can focus on more important things for the rest of my life.
# Step 1: tracking your daily expenses
Tracking where your money goes is the base layer of a healthy finance life and you need the low-level data to properly analyse your spendings and to get some insight about your finances.
I personally use an [app](https://play.google.com/store/apps/details?id=com.realbyteapps.moneymanagerfree&hl=en_US&pli=1) to track my expenses since \~5 years, but I know of people that just look at the monthly history in their eBanking (some have even automated the data transfer from eBanking to Excel).
# Step 2: documenting your finances monthly
Always on the first day of a new month, I open up my finance file and transfer all my tracked spendings form the app in to the file.
1. **Spendings**: I fill in all my income for this month (Salary, selling stuff, dividends, etc.; I track this as well in my app) and then fill out the costs (I differentiate between fixed and variable costs).
2. **Networth**: I go in to all my accounts (eBanking, Pillar 2, Pillar 3a, Revolut, etc.) and count my cash and all my other valuables and insert the current value for this month. This way you have a wonderful detail of your (hopefully growing) networth.
# Step 3: reviewing your costs from time to time
In the sheet “Costs”, the categories are the same as in “Spendings”. For each category you fill in the monthly cost (estimate or if you have entered some data already, use the average from “Spendings”) and then calculations are made to show you **how much you pay for this daily/monthly/weekly**. If you have done your configurations in “Config”, you will also find in the last three columns **how much you work for each category** (hours per month/days per month/days per year).
Check how you feel about the amount you spend on each category and if you are okay with working as long as you actually work to finance your expenses.
*I got this “how long am I working to finance category x” from the great book* [*Your Money Or Your Life*](https://www.goodreads.com/book/show/139674222-your-money-or-your-life)*. It is about how you value your work time and how people’s relationship with their job and the resulting salary can be looked from different perspectives.*
# Step 4: investing surplus money
If I have some money left at the end of the month, I use it in this order:
1. Paying off debt
1. Debt is negative wealth and it should be your **first priority** to pay it off to not get overwhelmed by recurring interest charges.
2. Building up your emergency fund
1. You want to have an emergeny fund for unexpected payments, if you suddenly lose your job or you get ill etc.. The amount in this account should make you sleep comfortably knowing that you have a backup in case something goes wrong. Normally people speak about **3-12 times your monthly** ***costs***.
3. Saving x% of your income for bigger expenses
1. Once your emergency fund is established, you can start to **pay yourself monthly**. You do this by transferring x% of your paycheck to your savings account as soon as your paycheck arrives (preferably with a standing order in your eBanking).
4. Investing into your Pillar 3a.
1. If you still have money left, now it’s time to invest it. The Pillar 3a can be deducted from tax, that’s why **I prefer to max out the amount in the Pillar 3a before I move on to other investments**. Since the money you pay into the Pillar 3a is left untouched until retirement (under normal circumstances), you have a long time horizon for your investments and therefore want to invest as much as possible (if you are closer to retirement you want to go down with your investments, but if you are young – go high). For example I invest 99% of my Pillar 3a into ETFs (no fancy strategies, just what my Pillar 3a offers).
5. Investing the surplus into a broad, low cost ETF
1. If you STILL have money left, congrats to you, you’ve come a long way and have a good and thriving finance life. Now you need to invest the money on your own. This is a very very very big topic and there are different philosophies as how to invest. I would really advise you to inform yourself and learn a thing or two about how the stock market works. General consensus for newbies in Swiss forums like [Mustachianpost](https://forum.mustachianpost.com/) or r/SwissPersonalFinance seems to be to just buy the [VT ETF](https://investor.vanguard.com/investment-products/etfs/profile/vt) via [Interactive Brokers](https://www.interactivebrokers.com/en/home.php). But please don’t just do what I tell you here, **inform yourself and do your own due diligence!**
—
Thanks for reading, if you have some feedback or additional ideas, let me know!
*This is a summary from a post on my own personal (non-commercial)* [*blog*](https://roufri.com/how-i-handle-my-finances/)*.*
*If you want some more details and further resources about this topic, look at the blog post or write me a message.*
by roufri