My Financial Spreadsheet: 5 Metrics to Track for Financial Independence

Creating your own system to track progress towards financial independence is a rite of passage. If you want to understand how to get there, there’s no better way than understanding your own spending and investment habits over time.

There are a bunch of services that can do this for you – The Mad Fientist has a website for tracking your progress to FI. Mint and Personal Capital both connect to your bank account to pull in your spending and investments. For many, this will be enough. But if you want to fully understand your finances, the only way is to do it yourself.

I’ve been tracking my finances in a Google Sheet since January 2015. I used Mint for years before that to understand my spending. I kept having unanswered questions that Mint couldn’t help with. This is the common reason why so many people switch to tracking on their own: they have questions they want answers to.

That’s the greatest strength about having your numbers in a spreadsheet – you can get those answers whenever you want!

Over the years I’ve dialed in my spreadsheet one row and column at a time. It’s to the point where I barely touch it anymore, yet can answer any question I have. I’ve found these five metrics to be the most useful over the years.

Now, I’d LOVE to share the entire spreadsheet, but it’s unfortunately not possible. The actual sheet is linked to my Tiller account, which means that it contains pretty much every bit of financial. If you haven’t used Tiller before, it’s kind of like Mint or Personal Capital. It pulls in all your transactions and balances from your bank account. Unlike its competitors, Tiller will save all of that data to a spreadsheet (either Google Sheets or Excel). From there you can categorize the transactions.

What I love most about Tiller is how much control you have. You can create your own sheets, charts and metrics from the data they provide. They offer a number of pre-built spreadsheets – which are possibly magic. You also have the ability to run one-off reports to generate insights.

Here are some of my most used sheets from my own financial spreadsheet. The ones marked “Tiller” were created by Tiller (you’ll also see their logo).

The Tiller-managed sheets are all controlled through the Tiller Money Labs Google Sheets Add-on. You can see it in the “Category Rollup Report” sidebar. Tiller has so many add-ons that I haven’t even tried them all. They even have a FIRE-focused “Retirement Planner” template. They describe that one as:

The Retirement Planner template from Tiller Money Labs estimates the total value of your investments into the future. You can experiment with different growth rate scenarios and project outcomes in real time.

Retirement Planner template explanation

In other words, these screenshots are just the tip of the iceberg. Once you start using Tiller you’ll have no shortage of tools to explore your finances.

Although I’m using Tiller, these recommendations would work with any spreadsheet setup. You could even track everything through Mint/Personal Capital and copy your monthly totals over to a spreadsheet (which I did for a few years). Whatever process works best for you – so long as you’re getting value from it.

1. Spending Over Time

How much did you spend last year? How about the year before that? Are you spending more? Or less? Can you predict how much you’ll spend this year?

Understanding your spending over time is essential to figuring out when you’ll reach financial independence. If you’re spending more each year, how do you know when (or if) your spending will level out? There’s a risk that it won’t and then your spending will rise to outpace your savings.

If you don’t know how much money you need to spend, it’s impossible to plan for it. If your salary increases over time, it’s also likely that your spending will due to some amount of lifestyle inflation.

If you’re used to spending more each year, then you’ll never have enough. At some point, your spending will need to level out. If you’ve tracked your spending year by year, you may see a line like one of these:

Which would you rather be? Fluctuating spending that’s reached a relative max, or climbing spending that hasn’t yet peaked?

For my own numbers, our spending peaked back in 2017 and has been declining ever since – mostly due to all the expenses needed to fix up a house and sell it.

Seeing your spending climb each year should be a red flag. It’s a sign that you don’t yet know how much you’ll need to reach financial independence.

I use Tiller to track my expenses over time and absolutely love it. It imports all of my transactions into my Google Sheet where I categorize them. I used to do this on Personal Capital and copy the numbers to my sheet, which took a lot more time. Having everything in one place saves me so much time!

If you can predict your spending, you can predict how much you’ll need to retire. If your spending fluctuates then that’s impossible. By tracking your spending over time, you’ll very quickly realize if you’re in control of your spending or not.

2. Savings Rate Over Time

Besides spending, the next most important metric to track while on your journey to financial independence is your savings rate. Your savings rate is the clearest indicator of how many years you’ll need to continue working.

Savings rate is simple: savings divided by total earnings. If you save $20,000 and have $100,000 in total earnings, then your savings rate is 20% for the year. At that pace, and starting from $0, you’ll reach financial independence in 37 years (!).

If you can raise that up to 30%, that lowers to 28 years. That’s 9 fewer years working by increasing your savings rate by just 10%!

In other words, the higher the saving rate, the fewer years you’ll need to work:

Tracking your savings rate over time can also be a canary for lifestyle inflation. If you see your savings rate drop, that’s an immediate sign that you’re falling off track.

During my earning years, this was one of the most important metrics I used. While you can track this on a monthly basis, I found it more useful to use a rolling 12-month time frame. My rate during any given month could fluctuate by leaps and bounds, but over a year it’s hard to hide.

For example, take a look at this chart of savings rate of a given month vs the previous 12-month moving average.

These are my actual numbers from 2018. In 2017 we fixed up and sold our house, which threw my SR way out of whack in the previous 12 months. It took a full year to raise it back up to where it was before.

If I was only looking at my monthly saving rate, I’d be thrilled to see these numbers! By looking at my 12-month moving average I got a more sobering view.

Seeing these numbers helped push me to save more during this time. That paid off and my 12-month savings rate climbed thanks to this reminder.

3. Withdrawal Rate Over Time

Once you start withdrawing money from your portfolio rather than adding to it you’ll switch from tracking your savings rate to tracking your withdrawal rate.

Your withdrawal rate is a measure of what percentage of your portfolio you withdraw each year. The formula is also simple: total spending / total cash & stock investments. Your withdrawal rate doesn’t take into account your home, car, or other assets.

Early Retirement Now has a 43+ part series about what withdrawal rate is, how your asset allocation impacts it, and just about every other thing you can think of.

The tl;dr of the series comes down to:

• A 4% withdrawal rate per year will likely last you forever.
• A 3.5% withdrawal rate or less will almost surely last you forever.

There are no guarantees, but by planning based on historical bounds you can at least be close. For our spending, we’re aiming for somewhere between 3.5% and 4% for our yearly spending. If we’re under that, then even better!

Fortunately, you can use the same setup to track this as savings rate. I track these each month, but also the rolling 12-month average. Seeing your WR for any given year provides more insight than just seeing your WR for a calendar year. It’s 11 more data points! If it peaks above 4%, that’s a red flag for me to make a change.

Here’s a look at my withdrawal rate for my first 26 months of retirement. For the first 12 months, my wife continued to work – complete with healthcare. In January 2020 she left her job and we started paying for insurance on our own.

At first glance this would look like a red flag. My WR was climbing, but during the first 12 months there wasn’t enough back data to know what a 12-month average would be.

Now that we’ve had no income coming in for 12 months, our 12-month AVG WR line becomes the most important metric for us. If it’s over 4% then that’s a red flag.

4. Asset Allocation vs Target Asset Allocation

Not everything you track needs to have a graph associated with it. They’re fun and exciting, but sometimes a table is all you need to answer a question.

An important question when investing that I found myself constantly asking was:

Is my asset allocation in line with my target asset allocation? Should I change anything?

Let’s say you’re aiming to have 50% of your portfolio in US Stocks, 30% in International stocks, and 20% in bonds (a classic three-fund portfolio). Over time your portfolio will drift away from this allocation due to fluctuations in the stock market.

In lesson 9 of my free Minimal Investor Course, I go over how and when to rebalance your portfolio. The first step to rebalancing is understanding when your portfolio is off target! I do this by comparing my actual investments with my target asset allocation.

By using a bit of conditional formatting with Google Sheets, I change the color based on how out of sync each asset is. I can quickly see that I could sell some bonds and buy some international funds and US funds to get back on track – or change where dividends are reinvested.

If you’re investing using M1 Finance, Betterment or Wealthfront they’ll do this all for you. Likewise, if you’re using a target-date retirement fund. If you’re managing your investments on your own then tracking this compared to your target will be your responsibility.

While I invest at Vanguard, any of these are great options if you’d rather let someone else handle the details.

5. Your FIRE Path

The last graph, the FIRE Path, puts all of these together: your spending, your savings rate, and your withdrawal rate.

What I love about this chart is that it shows where you were at every given year and allows you to appreciate your progress. If you had to dig yourself out of debt, your chart may start below zero too!

This assumes that a negative savings rate is a withdrawal rate. In my chart, a savings rate of -100% is equivalent to a withdrawal rate of 4%. This chart makes it clear that I’m aiming to have a withdrawal rate of 2% – something that would only be possible by making a little side income (one of my goals for 2021).

For more info on this chart, check out my post focused just on this topic: Where Are You On the Financial Independence + Retirement Matrix?

Why Track At All?

There’s a famous business-y quote that companies like to say: what gets measured gets managed. The same is true for your own numbers! By understanding your spending – the good and the bad – you can make changes. Seeing that growth can inspire you to keep going, or to correct course when you’re falling off track.

What about you? What metrics have been the most useful for you to track? Are there any numbers you look at on a repeating basis?