How I Track my Personal Finances

There was a time in my life when I was dirt poor and I was living paycheck to paycheck. Actually, I was living like, way less than from paycheck to paycheck. I was constantly in the red and having to do that mental calculus every single day as to do I have enough to eat today? Do I put money to the car for gas or do I just keep running up the credit card bill? And at that time in my life, I took up the ostrich tactic of avoidance. I put my head in the sand and I would stop looking at my bank account. I just stopped tracking my finances because I didn’t want to look at the number. It was so demoralizing all the time because I just knew that if I looked at the bank account, it was actually going to be lower than I thought it was going to be because I probably got hit with some overdraft fees and that was putting me deeper into the red and it was just going to cause more anxiety. I ignored my reality and then just kind of kept doing what I was doing and hoping somehow it would get better. But obviously that’s not a strategy that’s going to pay massive dividends.

So things really started to change for me financially when I took a different approach to this. And I started looking at my finances every single day and tracking this. And I kept a financial journal where I would write down every transaction from the day prior and then all the money that I had made from the day prior. Now on a day by day basis, I’m not making at that point, I wasn’t. I didn’t have a lot of money coming in, but by tracking what my expenses were, I started to get a really good picture of where I was financially. And they say that which gets tracked or that’s that which gets measured gets managed. And that was the truth for me. Where once I started looking daily at my finances, it started to grow.

And it was this weird thing that in hindsight it makes so much sense that of course, that which we focus on grows. But at the time, it seemed almost magical to me. Now, as I’ve built different businesses depending on where they’ve been financially, it’s one thing to, like, track the finances when times are good, it’s another thing to track them when they’re, when they’re bad. But in all cases, you need to have a process, a system for tracking your finances, both within your business and personally. So today I just want to talk about a simple system that you can use if you’re an entrepreneur for tracking your finances. This isn’t for your business. We’ve done some financial management and daily audits, and, like, we’ve talked about that in other episodes, but this one, I just want to share with you two systems, a system that I have found very useful that you can deploy right now to get a good handle on where your finances are. Because as an entrepreneur, as you start to invest in, like, real and stocks, bonds, crypto, all these different things, you have money in all these different accounts.

It can be really hard to know at any given moment, like, how much money do I actually have access to, like, in this moment? What’s my liquid net worth? What could I deploy? How much are my investments actually paying in dividends? And that can be kind of hard when you have, like, seven, eight, nine different institutions that you’re tracking across, and you’re like, there’s too much work. Right. So you need to simplify this. So, the two systems that I use, number one is a software called monarch money. Monarch money is one of my favorite budgeting tools. I don’t do budgeting anymore, but it’s a great tool for combining mine and Jamie’s finances into one place so that we can see all the transactions that are occurring on a day by day basis. I can see at a glance what our monthly cash flow is, and I can quickly look at the transaction histories and say, oh, we’re spending a lot on food this month, or a lot on travel or this expensive, that other thing. Right? I love that app for getting the.
The holistic picture of transactions as they’re coming in, so that we’re not getting double charged on things. Now, I don’t go in there and look at this every single day. I’ll share the system that I use at the very end for actually getting my daily reporting, but I’m not actually going in there and looking at this personally. But in the beginning, that’s what I would recommend. Get the monarch set up, link it with all your accounts, and then go in there. And in the first month that you use it, recategorize the different expenses to make sure that they’re going into the right place. And then as the software gets more sophisticated and understands you’re buying habits, it will get more and more accurate, and so you’re not going to be spending very much time in there having to re categorize things. The second software, or second tool that I use is software called Kubera.
K U B E r a. So I use monarch for the transactions, and just at a glance, very easily to see cash flows. Kubera is slightly different, which is it’s pulling in information from all your different financial institutions and your investments and putting it into one place. So you can see how much have my investments yielded in the last couple of days or last month or whatever it is, right? That can be kind of a tricky thing to see all in one place. It can tell you what your net, like, what your tax liability is for the year on those unrealized gains. So you can keep a picture of that. You can see at a glance, your liquidity, because it’s going to pull it in from all your different accounts. And just one single number you can look at at any given moment and say, oh, that’s my liquidity.

That might not seem like a big deal, but trust me, as you get bigger and your finances grow, you have more and more accounts. It can actually be quite difficult to track. How much money do, do I actually have access to right now? So those two softwares, in conjunction with one another, are 99% of the battle monarch, for tracking the transactions and the categorizations to keep a glance at. All these different credit cards are coming into one place. What are we actually spending money on? Making sure that we’re not overpaying for subscriptions or anything like that. And then Kubera over here to track your investments in real time, and then your liquidity. And so then what I do is I have two reports get sent to me daily from both of those softwares into one place. So, at a glance, I can see exactly what happened the day before in terms of transactions.

I can see exactly what happened with my investments, and I can see exactly where my cash position is at a glance every single day. Now, I also use an assistant to come through and do a lot of the categorizations and the bookkeeping side of things. That’s pretty advanced stuff. But for where you are likely on your journey, if you are a six, seven figure entrepreneur, I would start with monarch and then layer in Kubera. As you start to have a little bit more complexity with your investments, you want to track that stuff, your liquidity and all that. So those are the two, two softwares, and honestly, they’re awesome. I have no affiliation with them, so this isn’t some kind of sales pitch or anything like that. Just, I personally use them and I found them very valuable.

So go check them out so that you can get your finances under control and it’s not this big scary thing lurking off into the distance or hiding in the dark that you’re just ignoring. Get control over it and put your mind at ease. Go get some peace of mind. So that’s gonna do it for me, you beautiful people. I’ll catch you in the next episode. But until then, stay hyper focused, my friend.