Ok, you track your spending closely, avoid accidental expense, clear your debt, reduce spending using the “real” hourly pay tactic. Now, you want more, you want more indication that you are on the correct path to early retirement.
It turns out there is such tool, and you have probably seen it before. That’s right, it a chart. What I am going to introduce in this post is a simple chart I used to chart my financial progress.
Being a technical person, I used Excel sheet to do this task for me and this is how my chart look like after 6 years of feeding her my number:
There are only 3 numbers you need to fill in every month in this chart:
Your Total Income:
My method is a bit different from the “Your Money Or Your Life” book; total income in my definition includes your saving from previous month plus your total income this month.
Your Total Expense:
You can copy this number from expense tab of your expense-tracking sheet (if you don’t know what is that, read this post).
Your Investment Gain:
This is the part where you fill in your monthly investment gain. If you are getting paid yearly from your investment, divide it by 12 and enter the number here.
So, what are the benefits having such a tool? Why would anyone want to monitor another chart when they already done a good job previously?
To me, there are 2 benefits:
By using a chart like this, it gives me an overall view of how is I doing financially. I am not having any guesswork when I want to check my progress, I just open up my chart and everything that I need to know is there.
To me, looking at all those lines on the chart is already a joy, especially when there is a upward trend in my saving line while my expense line remains low and flat.