Peace, Love & Spreadsheets

 I hear frequent complaints from the world that financial literacy isn't taught in schools. It is, actually, but it's hard to get students to pay attention to issues that seem so far away from them. They haven't signed up to buy a house, they have no practical income, anything that comes in is disposable, so who pays attention? If there WAS any way for me to teach a 101 course in financial literacy, here are 10 assignments that I think might help. 1) At the beginning of the course - pick 10 stocks to track in the stock market. They should be companies that you know. What are their prices? At the end of the course, how did your stocks do? Would you have made more investing in these stocks, or a whole market index fund like VTSAX or FZROX?  2) Review the USDA cost of food site . What is the cost of food for everyone living in your house? 3) Find an adult who will share a single credit card statement with you. What were their total purchases? What were the largest expenses? Wh...

 In 2018 when I had some credit card debt, I realized something very important: The PURCHASES line on your credit card statement tells you all you need to know. It's not always the most obvious line, but it tells you if you SPENT more than you MADE last month. If you want to save money and pay down debt, you need to predict what the PURCHASES line will be. If you want to keep track of how much you spend, it means getting your statement every month and recording the PURCHASES line. That's my spending spreadsheet. It's really boring. I do not break my budget up into 50 categories. Once a year or so I might download all my credit card transactions as a CSV file for analysis, but most of the time  I don't. I just know that we can spend about $50/day on food and stay within our budget. On the 1st day of each month I add a new line to my budget spreadsheet.  Column 1: Date Column 2: Total Purchases made on my "charity" credit card (they're all auto bills, so the...

If you're a spreadsheet nerd, there are few applications more fun than mortgage math! You can project out your mortgage balance every year. See how many payments you'll shave off if you throw extra on the principle every month. See how many payments go away if you throw a tax refund at it one year. There are lots of ways to do it but here's how I set mine up. First, use the PMT function to find the basic loan payment. This doesn't include taxes or insurance.  =PMT(rate/12, years * 12, loan amount, 0) For example, to figure up monthly payments on a 6% loan for 30 years to pay off $200,000: =PMT(6%/12,30*12,-200000,0) = $1200 That $1200 will be your baseline payment. Of course this does not include taxes, insurance, or any other costs of owning a home (repairs!) but it covers the mortgage.  Using our same example numbers: A B C D 1 Month Amount Interest Payment 2 1/15/2024 $200,000.00 $1,000.00 $1,200 3 =A2 + 365.25/12 =B2 + C2 - D2 =B3 * 6% / 12 $1,200 You...