Useful charts and reports for home accounting?
June 8, 2020 9:24 PM Subscribe
I've been dilligently recording down household income and expenses for a decade now, but I realised that I don't really do anything with that data after entering it in. What are some charts and reports I should generate from the data in order to be more in tune with my finances and perhaps figure out how we could better manage our money?
So far I usually just take a look at the standard charts like "monthly expenses" or "net worth over time", just to make sure the trend seems okay. Mostly I just make sure our account balances aren't too low. However it feels like I could probably do more with the data I have. I have zero accounting experience so there are probably basic reports that I should be looking at but I don't know about, or don't know how to interpret.
The software I'm using for keeping my accounts right now is ledger, but it shouldn't really matter as I'm comfortable with writing some code to generate whatever reports or charts that would be useful.
So far I usually just take a look at the standard charts like "monthly expenses" or "net worth over time", just to make sure the trend seems okay. Mostly I just make sure our account balances aren't too low. However it feels like I could probably do more with the data I have. I have zero accounting experience so there are probably basic reports that I should be looking at but I don't know about, or don't know how to interpret.
The software I'm using for keeping my accounts right now is ledger, but it shouldn't really matter as I'm comfortable with writing some code to generate whatever reports or charts that would be useful.
Do you have those transactions categorized? I've been using Mint for nearly a decade, and it's often useful to be able to see plots of my spending - Restaurants over time, or on Auto repairs. That's good info to have for budgeting, for decision making (keep my current car or get a new one?) and for noticing things that seem out of whack. (why was my electric bill twice as high that month?)
A useful chart that many people make is "time to retirement". Plug in your current savings, savings rate, and amount that you'd need to retire, and see how many years you have left. (and then play with the numbers to see how making change X would affect it)
Related, but how about net worth over time? Looking back at that curve climbing upwards can be really motivating for some people. (started from the bottom, now we're here?)
A "minimal expenses" report? Figure out what your bare essentials are (rent, food, etc) so that you can plan your emergency fund accordingly?
posted by chrisamiller at 9:46 PM on June 8, 2020
A useful chart that many people make is "time to retirement". Plug in your current savings, savings rate, and amount that you'd need to retire, and see how many years you have left. (and then play with the numbers to see how making change X would affect it)
Related, but how about net worth over time? Looking back at that curve climbing upwards can be really motivating for some people. (started from the bottom, now we're here?)
A "minimal expenses" report? Figure out what your bare essentials are (rent, food, etc) so that you can plan your emergency fund accordingly?
posted by chrisamiller at 9:46 PM on June 8, 2020
My partner struggles to analyze numbers in lists, but loves the “sankey” style visualizations of inflows and outflows. So I’ve started building them (at sankeymatic) for our household tracking.
Good luck! I envy the length of your dataset. Analyzing this info is a newer habit for us, but empowering.
Agreed with the above about emergency fund. Planning that out in terms not of dollars but time was big for me. “If I lost my job I would have x months’ of rent and groceries covered.”
posted by mahorn at 1:21 AM on June 9, 2020
Good luck! I envy the length of your dataset. Analyzing this info is a newer habit for us, but empowering.
Agreed with the above about emergency fund. Planning that out in terms not of dollars but time was big for me. “If I lost my job I would have x months’ of rent and groceries covered.”
posted by mahorn at 1:21 AM on June 9, 2020
It depends somewhat on where you are financially. If you're barely meeting your savings goals (you have goals, right? e.g., "20% to savings, 10% in retirement"), you might need to record and categorize your spending.
For us, we usually achieve our savings goals, and meticulously recording spending doesn't really help. Instead, I calculate high level stuff to make sure we're on track. For Instance:
Checking + savings: did they go up or down this month? By what % of gross income (others use net)?
Taxable investments: how much did we add or withdraw this month? What were the returns or losses this month? (Easily calculated by this months balance - added or withdrawn - last month's balance). Same for tax-advantaged investments.
Did our net worth go up or down this month, and was it our spending or the market?
All of these are automated in a Google spreadsheet so all I do is plug in this month's balances and transfers. It does the calculations and generates a snapshot of the past month. It also calculates things like "savings rate all time" and "investment returns, last 12 month average." There's a tab where these things are graphed but I never look at it.
There isn't a single set of charts and reports I create, but this setup makes it easy to do one-off calculations and see trends. Are we savings more than a year ago? Is our savings rate going up or down on average? Answering "why are our taxable and retirement accounts acting differently this month?" made me understand our finances a bit better. To me, this is about the ability to notice things and easily dig into them because most of the needed data and calculations are already done.
Also, every month I email a quick summary to my wife (email because I prefer to write it up and I want us to be able to look back on the summary). Writing up a narrative is a good way to think things through for 5 or 10 minutes. All the data entry and narrative work probably takes 15-25 minutes each month, which to me isn't much time.
posted by Tehhund at 12:31 PM on June 14, 2020
For us, we usually achieve our savings goals, and meticulously recording spending doesn't really help. Instead, I calculate high level stuff to make sure we're on track. For Instance:
Checking + savings: did they go up or down this month? By what % of gross income (others use net)?
Taxable investments: how much did we add or withdraw this month? What were the returns or losses this month? (Easily calculated by this months balance - added or withdrawn - last month's balance). Same for tax-advantaged investments.
Did our net worth go up or down this month, and was it our spending or the market?
All of these are automated in a Google spreadsheet so all I do is plug in this month's balances and transfers. It does the calculations and generates a snapshot of the past month. It also calculates things like "savings rate all time" and "investment returns, last 12 month average." There's a tab where these things are graphed but I never look at it.
There isn't a single set of charts and reports I create, but this setup makes it easy to do one-off calculations and see trends. Are we savings more than a year ago? Is our savings rate going up or down on average? Answering "why are our taxable and retirement accounts acting differently this month?" made me understand our finances a bit better. To me, this is about the ability to notice things and easily dig into them because most of the needed data and calculations are already done.
Also, every month I email a quick summary to my wife (email because I prefer to write it up and I want us to be able to look back on the summary). Writing up a narrative is a good way to think things through for 5 or 10 minutes. All the data entry and narrative work probably takes 15-25 minutes each month, which to me isn't much time.
posted by Tehhund at 12:31 PM on June 14, 2020
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Then if you realize that, for example, you're spending 20 hours/month of your life energy on buying fast food meals that you don't even really enjoy, you'll change your behavior.
posted by Jacqueline at 9:28 PM on June 8, 2020 [6 favorites]