How to Start a Personal Budget: Calculating Net Worth

Are you ready to take control of your personal finances?

Awesome!  Here’s what we’re going to do.  Instead of diving straight in, we’re going to take the stairs and slowly walk into the shallow end of the pool.  One step at a time.

Creating a “budget” can be simple.  I used quotes because I think the word budget can scare people off.  If you’re like me, it sounds like saying “we’re placing a hard cap on what you can spend each month, no more fun!”.  That’s simply not the case.

It starts with looking at what you’re spending each month currently.  To help with this, let’s jump over to Personal Capital and create a FREE account (if you click this link, I’ll earn a small commission and you receive a free personal financial tracking tool, it’s a win-win!)

Smaller, digestible chunks.

Ha, “smaller, digestible chunks”, what does that mean?!

If you’ve read my About Me page, you’ll know that I’ve been working in sales for most of my life.  By “most of my life”, I’m talking roughly 6 years or so.  For me, that’s enough time for me to have pretty good understanding of how sales teams operate within companies.  

What I’ve learned is that if you have an end goal (i.e. creating a personal budget), you need to take a step back and break things up into smaller, digestible chunks of information.

As it relates to sales, if you have a monthly goal of $10,000 in monthly recurring revenue, figure out what you’ll need to sell each day in order to be on pace for that monthly target.  Then, you can even break it down further and start thinking about how many calls you’ll need to make in a given day to reach your pacing goal of $500 per business day.

Start with your net worth.

Personal Capital is great for calculating your net worth.  It syncs up with almost every bank, investment account, or credit card that you own.  At least it did for me.  

But, when it comes time to creating a budget, I highly recommend keeping track of this information within Excel or Google Spreadsheets.  I created an Excel spreadsheet that you can use, my treat!  

Click this link to download my free Net Worth Calculator.

Once you’ve downloaded my net worth calculator, open up your Personal Capital account as well (after you’ve synced up all your accounts).

It doesn’t matter what day of the month you start, enter in the date under “Start Date” within my sheet.  The other months will automatically be filled in.  We’ll start tracking from the day you fill this out and the end of each month moving forward.

The purpose of this calculator is for you to start getting a feel for the percent changes to your personal finances each month.

The numbers within the spreadsheet are used as an example, not my actual numbers.

Continuously update this.

At the end of the first month, open up Personal Capital and my Net Worth Calculator.  It’s time to fill in your balances again in the next column.

Based upon the amounts you entered when you first started, you’ll be able to see the percent changes within each of the rows.  It’s really cool to see how you progressed within one month.  It’s also a good way to see how much your expenses are and the fluctuations each month.

If you need more rows for your accounts, feel free to add them.  Make sure that you copy any formulas so the report works as expected.  Don’t hesitate to reach out to me directly if you have any questions on this!

What’s next?

Be on the lookout for the next posts on this topic.  We’ll start dissecting your expenses.  The biggest factor in growing your net worth is to take control of how much money you spend each month.  Before you do that, you need to figure out what you’re spending your money on!

What do you think of the net worth calculator?  Are there any other items you’d like to see?  Please comment below, would love to hear your feedback!