Anyone who has the goal of improving their financial situation should at least be tracking their spending. Without knowing where the money goes once it gets into your accounts, it becomes extremely difficult to set realistic goals for yourself and build wealth over time. We use a combination of Mint and Excel to track all of the money coming into and going out of our lives, and it’s proved extremely powerful in helping us work towards our goals.
Now this post isn’t about tracking your spending, but rather one of the important things that happens as a result of tracking it in the first place. It comes down the idea behind a popular business quote, “What gets measured gets managed”, but can very easily be applied to our everyday lives. Once a personal goal has some kind of measurement attached to it, there are a ton of little things that happen almost automatically in your mind that will help you reach the goal. I’ve found that there doesn’t even have to be a specific number or target that you are trying to reach, it’s simply the act of tracking it that leads to improvement.
Once the metric you are tracking has entered your mind, your brain will begin to subconsciously take it into account for almost every decision you make related to the measurement. Some decisions will have a straightforward influence (choosing to buy a new gadget will increase my spending, lower my net worth, etc.), but there are hundreds of other decisions that you make daily which may have a much more subtle impact. As long as you have an understanding of what moves the metric up and down, your brain will do a lot of work for you without you even realizing it in some cases.
It obviously doesn’t make sense to optimize every decision for any given metric because that never works (optimizing ONLY lowering spending would cause you to not spend anything!), but letting a bit of your subconscious (or gut feeling) help guide some decisions you’re on the fence about is much easier if there’s a number somewhere that is being tracked consistently.
In addition to our spending, let’s look at several other things I track on a consistent basis and how that is helping us reach all of our goals, financial and otherwise.
Useful Tips For Tracking
- Consistency is key
- Tracking spending the occasional week or month rather than all the time will lead to poor results. Even after tracking every purchase we’ve made for the past several years, it’s not uncommon to be surprised how a few seemingly small items over the course of the month lift our spending above a monthly goal.
- If at all possible, automate the tracking
- There’s nothing that will cause you to lose interest faster than adding an extra task to your daily life (especially one as monotonous as data entry!). Tools don’t exist for everything, but they can be extremely useful when they do. Ideally you won’t have to do anything for the regular tracking, but can check in whenever desired to see what’s going on.
- Check in on the things you’re tracking
- How often to check in will depend on the measurement, but you can’t just start tracking and ignore it completely afterwards. Something like net worth isn’t worth checking on a daily basis, but maybe a quarterly or annual review fits your goals best. If possible, it may make sense to place the metric in plain sight around your house or office so you’re reminded of it frequently.
- Never focus too much on a single data point
- If you’ve ever tracked your weight before, it’s easy to get frustrated by the seemingly random daily fluctuations. That’s why it’s most important to focus on trends. For spending, one month may be abnormally high, but probably doesn’t need to be obsessed over. Reevaluate over the next few months to make sure it’s not a trend you should start worrying about.
What I Currently Track, How I Track It, and Why
First, the Financial Stuff
- Net Worth
- Spending
- Income
All three of these items are mostly tracked automatically thanks to Mint. Each of our financial accounts has been synced with the website which allows it to pull all of the transactions that goes in and out of our accounts on a daily basis. This includes our various bank accounts, credit cards, investment accounts, and more. I will check in occasionally throughout the month to re-categorize different purchases, but that isn’t entirely necessary.
Then on an approximately monthly basis I will export the transactions into Excel, categorize them all based on our own custom categories and sub-categories, then sum up all of the totals to get the big picture. Important items we pay attention to are the monthly spending and to a lesser extent, our savings percentage, but that fluctuates depending on income variety (bonuses, tax refunds, 2 vs. 3 paycheck months, etc.). Net worth is tracked, but we only keep an eye on that trend over a longer time frame, especially because it is highly dependent on market conditions at any given time.
Why do we track all of this stuff? Mostly for our goal of reaching financial independence and potentially leaving the standard 40-hour per week lifestyle decades before most people do. Knowing how much we spend is key to knowing how much we need to live off of indefinitely and are currently shooting for 25 times our annual expenses in investments (aka: the 4% rule). Our spending sets the number we need, our income determines how fast we can get there, and the net worth is the progress bar that shows where we’re at.
Next, the Fitness Stuff
- Weight and body-fat percentage
- Calorie and macro-nutrient intake
- Running performance (time, distance, and heart rate)
- Workout Consistency
Most of this tracking is fairly new to us after we decided to get into a bit of a fitness kick around Thanksgiving, but the tracking itself has been great for staying motivated. It started with both of us getting Fitbits (specifically the Charge 2) which was soon followed by a “smart” scale (this Fitbit branded one) that automatically uploads our weight and body fat % every time we step on the scale (prior to this, we didn’t even have a scale in the house). Simply wearing the Fitbit and stepping on the scale gives us a ton of data that we don’t have to go out of our way to track.
Without a goal, most of this data is hard to use effectively, but we basically set goals for ourselves by signing up for a bunch of events to test our fitness! A 69-floor stair climb, a few obstacle course races, and a half marathon are all on the schedule for the next 6 months and there’s a decent chance we’ll add more.
Once we started ramping up training a bit and I read more and more on proper training plans and basic athlete nutrition, I realized that the native Fitbit app wasn’t going to cut it for all the tracking I needed. Luckily, Fitbit can sync data with a ton of other applications and act as a “hub” of sorts for all of the information which works pretty well.
First, I wasn’t a fan of the results page in Fitbit after going on a run. As most of our upcoming events are running based, running has been an important part of our training and I really wanted to dive into the metrics behind each one. After searching around, I settled on Strava as the best free solution. Now we can still use the Fitbit itself to track the run which works great, but can now use the Strava interface for better analysis. This includes things like pace over time, elevation changes, a better heart rate view, weekly mileage, and more, plus some other stuff like shoe mileage is nice to have. I’m also a big fan of the segment high scores which let you compete against other local runners to be the fastest for a particular stretch of trail or road. Competition is a big motivator for me, but everyone is definitely different in that respect. Strava also tracks personal records for common distances like the mile, 5k, and more which make tracking our improvements over time very simple.
Next, I didn’t like the level of detail Fitbit provided in the app in regards to the different nutrients in the food we were eating. After a bit of research, I learned how important protein is for building and maintaining muscle, but it was extremely difficult to see if I was getting enough in the Fitbit app, despite plugging in all of the food I was eating. After more research, I found MyFitnessPal which does a much better job of tracking and displaying this macro-nutrient information (such as carbs, fat, and protein). In addition to the better interface, it also has a bigger selection of food information and still syncs effortlessly to Fitbit in both directions. This allows it to adjust daily calorie goals automatically based on how active I was during the day!
The last thing I track related to fitness is how many workouts and of what type I’m getting in each week. For this one I went old-school and made a nice printout that has a row for each week in the next 6 months and check-boxes for each type of workout I hope to accomplish during the week. This piece of paper currently sits front and center on our refrigerator as a constant reminder of the goals I’ve set for myself. It includes a specific distance running training plan (the “Red Plan” from this highly rated book) in addition to more obstacle course specific strength training such as pull-ups and burpees. I also manually track things like the max pull-ups I can do in a row, most burpees in one session, and other numbers that I hope go up over time.
Why do we track all of this stuff? To help meet our goal of improving our overall fitness levels! The current goal is to do well in the different events we’ve signed up for, which then leads to many sub-goals such as increasing our strength (measured in # of pull-ups and similar body weight exercises), lowering our body fat percentages (measured by the scale/influenced by the results in MyFitnessPal), lowering our personal best race times such as the 5k (measured by Strava), and more.
For most of these measurements (but not all), we don’t even have a specific number or timeline, the goal is just consistent improvement over time. As long as we’re tracking it all and paying attention to the trends, adjustments only need to be made as desired or when something plateaus.
Other Stuff
- Sleep
- Miles driven
- Time spent at the office
Another feature of the Fitbit Charge 2 (and maybe some other models?) is that it will track your sleep if you wear the device to bed each night. Prior to this, I had no idea how many hours per night I was getting and could only estimate based on when I thought my body was going to sleep after getting into bed each night. Now it’s all automatic, but I haven’t really taken any action based on the data itself. Turns out I’m getting a pretty good amount of sleep and don’t really care about the details beyond hours. This is probably why I haven’t looked into a sleep specific app with more information that syncs with Fitbit (although I’m sure they exist).
An additional metric we track is how many miles we drive which is entirely automatic. Our insurance company (USAA) provides a 5% discount for installing a device that tracks your driving habits and while I’d probably do it for the discount alone (people’s privacy concerns with these are a little silly considering that most of them carry a smart phone with them at all times), the company is nice enough to let us see the data ourselves. Logging into the website shows exactly how many trips we’ve taken since installing the device including other items like miles driven, average speed, and more. One item that we found useful was looking at how many miles we had driven over the past year when shopping for a car. This helped us decide what kind of mileage range we wanted to look for given the amount of time we plan to keep the car. Other than that, I haven’t found much practical use of this info yet.
The last random thing I’m currently tracking is how many hours I spend at the office. This one came about randomly when I was looking through IFTTT recipes and stumbled across a recipe that tracks how long you spend at any given location. By using the IFTTT app on your smart phone, you can set up a specific geo-fence that will log your arrival and departure times into your own google docs spreadsheet. I thought it would be cool to track how long I was actually spending at the office, so I set up a location for my office building and hit go. I haven’t really used the data for anything yet, but I’m sure it will be useful at some point in the future. I could also see this recipe being useful for something like tracking time spent at the gym if you’re trying to determine whether or not to keep a membership for example.
Why do we track this stuff? No real reason at this point, but I’m a big fan of data and found these items fairly interesting.
You Are What You Track
For many of my goals in life, tracking different numbers related to those goals has helped set up realistic smaller goals, track progress, increase motivation, and simply help me make better decisions. I’m a big fan of data, but I know others can’t stand to look through a bunch of numbers. Even if you’re not into pouring over details, something like a quarterly check-up or a simple checkbox calendar that lets you see progress over time can be extremely powerful.
What are you tracking right now to help you reach your goals?