Recently, xlyourfinances teamed up with www.replaceyourmortgage.com. Replace your mortgage is a method for paying off your home in 5-7 years. The replaceyourmortgage team was looking for a personal finance tool to offer to their customers to help them manage their money better and to make sure they were achieving their mortgage payoff goals. Before I would team up, I decided to look into the replaceyourmortgage method and decide for my self if it was legitimate or not. After researching the website and talking to the owner of replaceyourmortage, I took the leap and became a replaceyourmortgage customer. After going through the educational videos and working with the on-line community, I was able to replace my traditional mortgage with a home equity line of credit with no closing fees. I am not only saving interest dollars, but I have dramatically reduced my loan principal in a short amount of time which is further reducing the amount of interest I am incurring on my house. The effect of a lower interest rate being calculated on a daily basis coupled with the reduced principal has had a major impact on how long it will take me to pay off my house. The best part, is that because your mortgage is completely replaced by a home equity line of credit, you have no risk of paying 'too much'. You can always access the equity you created with your payment and have the cash you need, when you need it. There are many other benefits to the replaceyourmortgage method and I strongly encourage you to check out their website to see if the method will work for your unique situation. It definitely has worked for me and I find myself telling everyone that is interested.
Replaceyourmortgage has now endorsed xlyourfinances as the personal finance tool of choice for its customers. As a replaceyourmortgage customer you will gain access to a special instructional video created to show exactly how xlyourfinances makes it easy to track your finances using the replaceyourmortgage method. You can learn more about this exciting concept at www.replaceyourmortgage.com
by Brad Hoffer
Soon after we moved into our house, a new couple, who I will call Jack and Diane, moved in across the street. We actually knew Jack from high school. Jack and his wife were very nice. I knew he was a banker, but didn't know too much more than that. We would talk from time to time, but most of the time we just waved "hello".
What I did notice, was how Jack lived. Since our neighborhood was new construction, most of us had half-green yards, but not Jack, he rolled out plush green grass. "Wow, look at Jack's yard", I would say to my wife as we drove up to our house. It was professionally landscaped and just looked perfect. From time to time Jack would park his Escalade and boat along the street. It was big and it was nice. Soon Jack got a stainless steel pool and built a patio with a ceiling fan. His backyard was mainly a hill, that is until he basically turned it into a pyramid with all of the stone pavers, steps and fire pit at the top. I usually try not to compare to others, but I found myself saying to my wife, "I don't know how much money bankers make, but there is no way it is that much! He must have some kind of inheritance or maybe he is the president of the bank!" Now at this time, he would have been in his twenties, so I was pretty sure he was not the bank president. The other thought I had was that maybe Jack had 200,000 in credit card debt!
Our house was built without too many upgrades, hoping someday we could add a deck, an island to the kitchen etc. But we knew we wouldn't be able to afford those things for many years. So at times, it was difficult to watch Jack just buy everything, all at once. I'll be honest, it really didn't bother me too much that I didn't have the things he had, however, it did make me frustrated with our own financial position. We felt like we didn't overspend and yet we had credit card debt, we had a large mortgage, school loans and there just never seemed to be enough money to be able to accumulate any real savings.
One day, I was outside and another neighbor asked if I heard what had happened to Jack? "No, what happened?". My neighbor explained…he was driving his car on a high bridge, pulled to the side of the road, got out of his car, ran and jumped off the bridge. The water is shallow, and typically, this would mean certain death. But somehow, miraculously, Jack must have landed in just the right spot in the river. A man was out fishing and pulled him out of the water, unharmed! Completely shocked by this news, he continued to explain, that apparently, Jack had been using his position at the bank to take out fake loans under his Grandpa's name. He had taken over $300,000 in loans, and spent it. He felt like there was no way out of the mess he had made and so he was hoping the life insurance money could be used to make things right.
Throughout the many months following this, the bank did an investigation, and decided not to press charges, they only wanted him to pay back the money. The court decided in addition to paying back the money, he would have to do many hours of community service. It is unbelievable, and controversial, that he didn't get any jail time. The house was foreclosed on by the bank, and all of Jack's things were sold off to repay the bank. His wife stuck with him throughout the whole ordeal and they got an apartment together and started a new life, with very few things. He worked at the meat counter of the local grocery store and eventually got involved in ministry at his church.
We have a neighborhood men's Bible study that meets every other week. Jack came to one of our meetings and shared some of his story. He was truly a changed man, and talked about how his view of money had changed, but that his new life wasn't an easy one, since he would be repaying his debts until his death.
I reflect on his story often…what if we had started to spend to keep up with 'the Jones's'? What if, by comparing to others, we let jealousy and bitterness ruin our lives when the reality was we were comparing ourselves to something that wasn't real? It reinforces to me, that we each have our own life to live. It is a life that God gave you, the job that He gave you at this point in your life, friends and family that He wants you to love. You can spend your whole life wanting something more, wanting what someone else has, but at the end of the day, finding contentment, is one of the greatest riches known to man.
by Brad Hoffer
Succeeding in budgeting, spending less than you are making, carrying no credit card debt, all of these things are a mind-set. A mind-set that says, this is what we 'will do' and this is what we 'won't do'. For years, I fell into the trap of believing that I was somehow beating the system with 0% credit card offers and then juggling the debt from card to card in order to quote / un-quote, "accomplish our goals".
The problem with credit card debt, even at zero percent, is it sucks the fun out of whatever it is you bought. Every time you use your new TV, new computer, put on your new clothes, you have the stress of knowing you still owe hundreds of dollars on your credit card bill. Hundreds, that you don't have. You do the math to see if you can pay it off before the high interest rate 'kicks-in'. Each month you make a payment and each month, those things that you bought are no longer new, in fact, they are getting old. What's worse, if an unexpected expense hits (i.e. stove breaks) you suddenly are in over your head. You cannot afford to buy the stove and you must use a credit card. Now you have just made your situation much worse. You start looking at what the interest rate will become, start looking for other areas of income and where you can cut-back. This is what I call, "the Credit Card Prison", because there is no easy way out, it just takes time, painstakingly slow, time.
This is no way to live. What did you gain? If you save up your money, then make the same purchases, you might have to wait longer, even a year, but in the end, your life is so much fuller. And if what you want is technology, you will always be better off waiting. It will be cheaper and/or there will probably be something better.
So why do we fall for this lie. I remember getting 0% offers and believing it was free money. The truth is, it is not money, it is debt, it is bad-debt. There are situations where it is unavoidable, but as far as you have the ability to avoid credit card debt, you need to avoid it. Your stress, your peace, your happiness will all be improved if you can live without it.
Today, my wife and I do use a credit card, but we pay it off in full every month. We have the mantra, 'never again'. What we mean is, we will use all our power to ensure we will never carry credit card debt again. This is what I call a mind-set. We have set our minds, we have agreed upon a common goal and it influences our conversations and our decisions. This is a powerful way to truly gain control, to guard yourself against the debt trap.
Now when I see a 0% offer, I smile, shred the junk mail and move on with my day in freedom.
By Brad Hoffer
How many categories should you use when you budget? 10? 20? 40? When I first started tracking our spending, I probably had 40 categories. Today, I use 10 spending categories. So why did I change and which way is better?
I really think it is personal preference, however, I would like to share my experience. When I had so many categories I found budgeting to be overwhelming. I also found that when I created a budget for so many small categories, often things in our life would change and I was spending lots of time adjusting budgets, moving budgeted dollars from one category to another. I stepped back one day and said, 'why am I doing this?'. My main goal is to spend less than I make. If one month we needed to spend more on food and less on home improvement, what difference did it make? My main concern was making sure that in total, we didn't overspend. What I landed on was to focus on fewer, but larger categories. I ended up with 5 variable and 5 fixed expense categories. This made it a lot easier to remember what category items fall into. It also reduced the number of times I had to adjust where my budget dollars belong.
I will be honest, the detail-oriented part of me still struggles to group so many things together into one group. But if I am even more honest, I really believe we are doing better today with sticking to our budget than ever before. By reducing the number of categories, you give yourself the flexibility you need to adjust to the needs of the month and still control your overall spending.
If you are familiar with xlyourfinances, you realize that the number of categories doesn't really matter because the spreadsheet will automatically categorize and summarize them against your budget. So there is little to no extra work regardless of the number of categories you have. However, I still believe that when you sit down and look at your budget vs. actual, you are better off with less categories. Each week you are more likely to be focused on your goals and more determined to reduce your spending if you can see the one or two areas you need to improve vs. 15 areas because you have 40 categories you are trying to analyze. This is why I say, "less is more".
This brings me to my concluding thought. There are many products available to choose for personal finance. I don't claim that xlyourfinances is for everyone. But I do believe that for the majority of individuals and families across almost any income level, it will be an invaluable tool in keeping track of and improving your understanding of your finances. Xlyourfinances will help you set goals, reduce your stress and improve your financial situation by giving you the information you need to make informed financial decisions. Whether you decide to use 400 categories or 10, it is your choice and there really is no wrong answer, as long as it works for you!
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by Brad Hoffer
For years, my wife and I have struggled to overcome the trap of spending more than we make. When you sit down to budget and compare your spending vs. your income, it is not much fun when you are perpetually in the hole. No matter how you look at it, it is just depressing. These negative feelings make it very difficult to continue to pay attention to your finances because no one enjoys getting bad news, week after week, month after month, and year after year.
It seemed impossible to break the cycle. Everything we were buying seemed necessary. Now, 'necessary' is a very relative word. I may feel we need to eat out because neither one of us wanted to cook that night and it was 'necessary' for our sanity to just enjoy eating out that night. I may feel we need to replace our vehicle because it is nickel-and-diming us and it is 'necessary' to have reliable transportation. It is 'necessary' to have nice clothes for my job. It is 'necessary' to fix up the house. It is 'necessary' to add a patio to the back yard. It is 'necessary' to upgrade the dishwasher because the dishes just don't seem to come clean anymore. On and on the list of 'necessary' items grows and grows. So what can you do?
I believe the only way out is to become 'fed up'. 'Fed up' with the stress, the worry and most of all, the feeling of helplessness. You then use this frustration to become determined. Determined to spend less than you make, regardless of what that means. This sometimes means taking drastic measures. But no bad habit or routine is easily broken. Changing your heart and mind regarding your money is incredibly difficult. Your way of thinking seems logical and your reasons for spending seem legit. But until you can break down the walls that cause you to continue to fall into the overspending trap, you will not succeed.
But the moment you do break the cycle and start spending less than you earned, suddenly, budgeting becomes fun, that very month! I should clarify what I mean by budgeting. To me, budgeting is the act of comparing your actual results to an accurately prepared budget. When your results are better than your budget, you can't help but be happy. You feel empowered, in control and you feel a sense of freedom.
How many times have you heard the phrase 'financial freedom'. What does this mean to you? I use to think it meant you had so much money you could just purchase whatever you wanted, when you wanted. What is interesting, I know several millionaires, and they just don't spend much money. They set limits and parameters and live within them. Why? Because financial freedom is not being able to buy whatever you want, it is buying what you can afford and living free from uncontrollable spending habits. Overspending is not freedom, whether you can afford it or not.
It is very interesting, when you spend less than you make, you find 'financial freedom', regardless of income. You are free from the financial pressures and stress that come from carrying debt and you feel more prepared for the future.
Fun budgeting is when you sit down, and realize you have some cushion, because you spent wisely, made a plan and stuck to it, or even beat it. If you want budgeting to become fun, stop overspending and you will find true financial freedom.
When searching on-line for a free excel budget template, there are literally thousands of templates available. Most of them are simple templates where you need to know how much you are spending in each category and you type in the amount. This is asking a lot considering that the average family has nearly a thousand transactions a year. The goal is to make Excel do these calculations for you. The problem is that no one wants to manually track every transaction in order for Excel to add them up. Fortunately, your bank and credit card companies have what is called a .csv download, which stands for "Comma-Separated Values". I have yet to find a bank or credit card that doesn't make this available. A .csv download will open in Excel, however, the new problem that results is that they don't all use the same column order and formatting. This is where XLYourFinances Automated Template makes importing your bank and credit card transactions easy because it has macro buttons that make re-arranging a .csv download simple. What is a macro button? A macro button is a button that you can click on that causes a programmed event to happen. These macro buttons is what differentiates a normal template and an automated template. The purpose of these macros is to save you time, lots of time.
So now that you have downloaded your transactions into Excel and into the right order and format, the next issue is removing those transactions that you downloaded previously. If you have ever done this manually, you know this can be time consuming. XLYourFinances instantly analyzes every transaction and identifies those transactions that are already posted. You click the button "Remove Already Posted" and they are automatically deleted. Now you can glance at your running balance at the right and see that you are in balance with your bank or credit cards "Current Balance".
At this point, the next thing to do is to categorize your transactions. Again, this can be a time consuming activity, however, XLYourFinances will automatically label your transactions based on how you labeled them in the past, leaving only those truly new items for you to categorize. The process is quick and easy, as you begin to type, Excel auto-completes the category and you just hit enter. Once you are satisfied with the labeling of your transactions, you click the "Post" macro button and your transactions are automatically added to the transactions tab where you now can use auto-filter to search and find any specific transaction or group of transactions that you have ever posted. If you are familiar with auto-filter you know that it allows you to search by date or ranges of dates, a phrase or word and it will find everything that contains that word etc. It is very powerful and is the reason why XLYourFinances puts all of your transactions in one page, so that you get the full benefit of auto-filter.
What's next? You now want to be able to see, by your categories, the balance by month and/or by year. This helps you see where your money came from and where it went. XLYourFinances accomplishes this on one tab. You can click a macro button and it will toggle between comparing month to month or comparing year to year. This makes understanding what has happened to your finances easier to comprehend and can be motivating to not repeat the same past mistakes.
The ultimate payoff for downloading your transactions is the budget tab. On this tab you can first establish your budget by comparing to any past three year period to arrive at your goal by category for the year. The transactions you download are automatically compared by category to your goals month and year to date. The comparison of your budget to your actual spending allows you to know if you are achieving your goals or not. You now know exactly how you got to your current position and can make adjustments if needed.
When I hear people talking about their finances, there seems to be a degree of mystery and confusion about 'where the money went?'. There are thousands of apps and programs available for working on your finances, but at the end of the day, to truly know what is happening, you need the detail, you need it summarized, and you need it compared to a budget. Yes, there is a little bit of work to get your information into the template, but in doing so you receive the added benefit that comes from looking over each transaction before you post it. You may uncover fraudulent charges, you might see items you forgot about, and at the very least, you see how much you spend and that is always sobering.
In conclusion, an automated excel budget template helps simplify the process of downloading your transactions, automatically removes duplicates, verifies you are reconciled to your on-line account balances, categorizes transactions using the categories you want, consolidates them to one tab for easy filtering, summarizes them month to month, year to year and compares your spending to your budget by category. XLYourFinances is confident that once you get comfortable with this routine, you will not know how you ever did finances before.
by Brad Hoffer
When most people think of an Excel Spreadsheet, they think of it as a computerized adding machine. However, when you start learning some of the advanced features, you realize that there are endless possibilities to make Excel do most anything you want. I remember when I first learned a few formulas in Excel and thought I “knew” Excel. Well, 15 years later and I am still learning new things all the time. Those formulas were like discovering a puddle of water beside a swimming pool and thinking that was the pool!At work I have used Excel to create some interesting programs that have solved some very complex problems. I always did my personal finances in Excel, but I never spent hours developing the spreadsheet as a program like I do at work. So about 4 years ago, I decided to tackle building the ultimate personal finance program in Excel. During this process, I have had plenty of doubters who did not understand why I was obsessed with building features into Excel that already existed in other programs. My answer, “those other programs are not Excel!” At the end of the day, most people who use any type of Accounting or finance program, end up exporting their information into Excel. Why? Excel is the best place to store, analyze and summarize data.
I am happy for the opportunity to tell you about the program I created: The xlyourfinances spreadsheet which I now sell at www.xlyourfinances.com
So what are some of the ‘advanced’ features built into the xlyourfinances spreadsheet vs. an ordinary spreadsheet? I have listed some of those features below. All of these features have two goals in mind, to save time and to give you control over your finances.
Time Saving Features:
1. With a click of a button, categories are automatically assigned to transactions based on past purchase history. By the way, you name your own categories.
2. Automatic removal of duplicate entries. When you download transactions from your bank or credit card company, they are verified against past purchase history and duplicates are automatically removed. This keeps your Current Balance in synch with your on-line statements.
3. Formatting and alignment. If you ever downloaded transactions from your bank or credit card company, you know how ugly some of these downloads can be. Downloaded transactions are easy to get into the correct format and alignment with one click column swapping and one click inversing of values when needed.
4. Summarized, Organized and Reconciled. By its design, xlyourfinances spreadsheet simultaneously summarizes your category totals, reconciles your accounts and completely organizes your finances.
Control of Your Finances:
Real-time budget results. Perhaps one of the best features is the simple but powerful design of the budget tool. You simply enter budget amounts for each category and the spreadsheet does the rest. Your actual spending is compared to your desired budget so you can see how you are doing for the month and year to date. And of course, you can go back in time to any year or month.
1. Cash Forecasting. The spreadsheet projects your day by day bank balance from the last posted transaction through the next 30 days based on your normal recurring and/or non-recurring activity. This gives you full confidence that you have all of your expenses covered.
2. Personal Financial Statement. Year to year, are your finances improving? The personal finance statement tab is an annual review of how you’re doing. Setting long-term goals and then seeing your progress is an essential component to gaining control over your finances.
3. Quick Research Tools. You can store virtually a lifetime of finances in one spreadsheet. It is very simple to filter thousands of transactions in an instant to find exactly what you are looking for.
If you own Excel and have a desire to get full control of your finances, go to www.xlyourfinances.com and get your personalized copy today
I have been an Auditor, Analyst, Accounting Manager, Business Systems Manager, Controller, School Board Vice President, Director of Finance, CFO and Senior VP of Operations over the past 2 decades of work experience. In my free time I developed the XLYourFinances spreadsheet and website I enjoy golf and spending time with my family. We attend church at LCBC.