Are you ready to pull the trigger and finally get your money in order? Are you ready to automate it so you can sit back and watch it work? If you just said yes and yes, you are in the right place. It all starts here. In this article you’ll learn how to get a complete picture of where all of your money is and best of all it will automatically keep itself up to date for you.
I get the same question quite a bit from my readers. They often ask, “where do I even begin?”
This is it. If I were to start all over tomorrow with a completely new money situation this is where I would begin. If I was hired as a consultant to help someone sort out their money situation, this is where I would begin.
If you’ve followed me in the past you know I’ve struggled with money before. I took steps to fix it and learned a great deal while doing it.
If you’re struggling with money and don’t know where to begin you’re in for a treat. Sit back, read, and prepare to fully understand your finances possibly for the very first time.
The Complete Money Picture System Steps
The first step in this whole process is to get a Complete Money Picture of all of your personal finances. In other words you need to know where every bit of your money is. Your bank accounts, credit cards, loans, investments, etc. You need to know where it all is.
You need to visualize it. You need to be able to see on one page all of your money and instantly know how much you have, how much you owe, and the difference between those two.
Just by knowing exactly where all of your money is and what you owe will be a big relief. You will immediately begin to eliminate some of that uncertainty and stress of not understanding your money.
This will take some time to initially setup, but once it is setup, it will nearly maintain itself and your complete money picture system will only be a couple clicks or swipes away.
I’m going to show you how to do exactly that right now.
Step 1 - Income
I recommend going ahead and grabbing a pen and paper, laptop, iPad, or whatever you would like to use at this point to follow along. The first thing you will need to do is list all of your recurring income.
List the source of the income, the frequency of the income, and the amount of the income.
List your monthly job income. If you are doing this with a spouse, add theirs to the list as well.
If you're an entrepreneur list your estimated monthly income based on your past history of income to the best of your knowledge. If you don't know exactly that is, that's ok, just get a round about number.
List any other recurring income such as side businesses, rental real estate income, etc. List any government assistance income or any other income you receive monthly.
Step 2 - Bills / Expenses
Next, we are going to list all of your bills.Think of every bill you have to pay monthly except those that are automatically deducted from your paycheck at work.
Some common examples are:
List the following for each bill or expense:
Company Phone Number
Type of Service
Address to send payment to if mailed
Amount you pay
Frequency of payment
Step 3 - Debt
Now, let's move to your debts. If you don't have any debts, congratulations! You are in the minority. If you do let's get started figuring out what they are and how much you owe.
Find all of your debts. Here are some common examples:
Lines of Credit
List the following for each debt:
Company Phone Number
Type of Debt
Address to send payment to if mailed
APR (Annual Percentage Rate)
Now we're making serious progress. Your financial picture is slowly coming into view.
Step 4 - Assets
Let's move to something a little bit more fun. List all of your assets. :)
Here are some common asset types:
We're looking for physical items with considerable value. Don't worry about little things. To simplify, stick to big purchase items such as cars or homes.
List the assets by the following:
If applicable, make and model
Year it was made
Current estimated value
If it has a debt attached, the amount owed on the debt, this should already be in your debt section
You may be wondering exactly how to estimate the value. Today it is relatively easy. There are a lot of great tools out there on the web to do this now.
Here is a warning: They are not 100% accurate, but they are close enough to give you the financial picture you need.
For your house or rental property use the most common tool, Zillow. Goto zillow.com and enter your address and it will give you a relatively good valuation of your properties.
For your vehicles, Kelly Blue Book is a pretty good standard. Goto kbb.com and enter all the information for your vehicles.
Next for assets, we're going to list all of your bank accounts.
List your bank accounts by the following:
Name of the bank or credit union
The account number
The routing number
The current value of the account or accounts
We're digging deep but this will pay off in huge dividends once we've put all of this together.
Step 5 - Investments
Now let’s move to your investments. You'll need to list all of your investment accounts.
Here are some common investment types people have:
Certificate of Deposits (CDs)
401K’s with Mutual Funds, Index Funds, or Stocks
IRA’s with Mutual Funds, Index Funds, or Stocks
Whatever investments you have, list them by the following:
Bank or investment company
Type of investment
Setting Up The Complete Money Picture System
OK, at this point if you have not yet completed the previous tasks, you'll want to do so now, because everything going forward is going to use the information we gathered in the previous steps.
If you’ve completed them, congratulations! You've made a huge step forward in automating your money. You're probably already feeling great, because you now know exactly where all your money is, what assets you own, where all of your debt is, and even where all of your investments are!
Now we're going to take all that info and put it into software that will keep that information up to date and current for us going forward! Once you've setup what I call the, Complete Money Picture System, you'll always know that information within seconds.
It will remove all that stress of not knowing where your money is and give you the control to make better financial decisions!
Step 6 - Sign Up For Mint
I've researched lots of software and applications for organizing your money. I'm going to focus on one of the most mature and supported software apps out there.
There are others but nothing has supported more connections and features than Mint at this point. If another app becomes better I’ll update this article in the future and believe me, I’m constantly looking.
I chose Mint to track my Complete Money Picture System.
To begin, sign up for their service which is free at mint.com and I recommend downloading it to your phone as well so you will be able to see your system anywhere you go.
Once you've signed up, continue to next step!
Step 7 - Connect Your Accounts: Debt
Now it's time to take all that information from the previous steps and add it into Mint. Nearly every bank, lender, credit card company, etc can connect to Mint, so we're going to add each and everyone of them.
Let's begin with your debt. For each debt you have, you may already have an online account with them to login and view information on it or to pay the bill.
If you don't have an account login for each of them you'll need to create one now. Go to the company's website and signup for an account.
For example if you have Chase credit card, go to chase.com and sign up to access your account. You'll need all the information you researched earlier to create the account.
Take note of your username and password, you'll need it for Mint. Once you have completed this for each of your accounts return to mint.
In Mint Click on Add Accounts
In the search field type the name of your lender and then follow the questions to enter your username and password
Repeat this process until you have added all of your debts
Once you've complete the debts, let's move on to your assets.
Step 8 - Connect Your Accounts: Bank Accounts
Just like each of your debt accounts we're going to now add your bank accounts.
Each bank account should also have a website in which you can login to to view your current account balances and transactions. If you have not already setup your online account with your banks or credit unions you'll want to do so now.
Now we are going to add each of the bank or credit union accounts into Mint.
Just as before click on Add Accounts in Mint
In the search field type the name of your bank or credit union and then follow the questions to enter your username and password
Repeat this process until you have added all of your accounts.
Step 9 - Connect Your Accounts - Physical Assets
OK, we're getting close! Now let's add your physical assets.
If you have own a house or any other real estate let’s add those now.
Click on Add Property
Click on Real Estate
Enter the address of your property
It will automatically pull the value from Zillow for you!
Fill in any other details needed and make sure to select the debt used for that property if applicable.
Now let's do the same thing for your vehicles.
In Mint click on Add Accounts
Click on Add Property
Click on Vehicle and follow the question and it will automatically find the value of your car just as it did for your house
If you have any other assets on the list you created earlier go ahead and add them as well.
You can always add a manual asset if needed the same way you added your vehicle and real estate by choosing Other.
Step 10 - Connect Your Accounts - Investments
You're making great progress! Let's add one more category. Your investments.
This will work just like your previous accounts. Make sure you have an online account with each of the investment companies you are enrolled in.
In Mint Click on Add Accounts
In the search field type the name of the investment company and then follow the questions to enter your username and password
Repeat this process until you have added all of your investment accounts
Once you have completed this your are done! What you're looking at in Mint is your Complete Money Picture.
Your Complete Money Picture System is Complete
You now know exactly how much money you have, how much you owe, how much you have invested, and how much your assets are.
Do you feel a better sense of control over your money now? I know I did when I first did this.
The great thing about this system is that all the hard work is behind you. From now on Mint will keep those balances and values up to date.
You can see all you accounts categorized into Cash, Credit Cards, Loans, Investments, and Property. With a few simple swipes on your phone or PC you will have access to the most up to date information.
David Shepherd is the creator of Let's Automate Your Life. Learn how to automate your money and free yourself to do what you love!
Ready to get started? Sign up for my FREE 7 day email course that will get you started on the path to financial freedom. Check it out here.