The Missing Link in Personal Finance: Why Awareness and Measurement Matter More Than You Think
Have you ever wondered why some people seem so calm and in
control when it comes to their money, while others are constantly stressed or
confused—regardless of how much they earn? The difference often comes down to
one powerful habit: they consistently track their money and measure
their progress using meaningful, realistic benchmarks.
We grow up learning how to earn, how to save, and sometimes
even how to invest. But very few of us are taught how to track our
financial life or how to know if we are actually doing well. Without
tracking and benchmarks, personal finance becomes a guessing game. It is like
trying to reach a destination without a map or a GPS. You might be moving,
yes—but are you headed in the right direction?
The truth is that numbers do not lie. When you know what to look at and compare it with the right standards, you gain clarity. You can spot mistakes early, make smarter decisions, and build real confidence in your financial journey.
In this blog, let’s explore five key pillars of personal
finance—Income, Expenses, Investments, Returns, and Net Worth—and
understand how simple tracking habits can help you grow your wealth with
purpose and peace of mind.
🧾 1. Income: Know What You Truly Earn
Your financial life begins with income, but not just your
salary. Income also includes bonuses, freelance work, rental income, dividends,
or anything you earn from a side business or gig. Many people only look at
their monthly in-hand salary and never add up their full earnings.
When you track your total income, you understand your real
capacity to save and invest. But here is where benchmarks help. Are you earning
enough for your age, industry, and city? Are you growing your income steadily
year by year?
Sometimes, people stay stuck in low-paying roles for years
just because they never compare themselves with others in similar roles or
track their own growth. Start with a simple spreadsheet or notebook. Add all
sources of income. See if you are increasing it every year. If not, maybe it is
time to upskill, switch roles, or explore additional income streams.
Remember, your income is your fuel—track it wisely and
make sure you are using its full potential.
How I Track My Income: One Excel Sheet, Years of Insight
In the early days of my career, tracking income felt simple.
I had only one bank account, so my method was basic: Opening Balance +
Salary – Closing Balance. It seemed enough at the time. But as life
progressed—new jobs, salary accounts, a Demat account, and other income sources
like dividends—the simplicity faded. Suddenly, I had multiple bank accounts and
no clear picture of my total income.
That is when I realised I needed a better system. I began
digging through old emails, salary slips, and income tax statements. My
company’s annual tax calculation sheets turned out to be gold—they gave a clear
snapshot of my monthly and annual income, and I began saving them year after
year. Slowly, I built a detailed Excel sheet with over fifteen years of income
data.
This record has become incredibly valuable. It helps me see
income trends, track bonuses and increments, and even plan better for taxes or
job changes. For non-salary income like dividends or freelance work,
I update it occasionally. The main lesson I have learned is this: keep your
number of bank accounts to a minimum, track consistently, and maintain a simple
yet powerful Excel sheet. It does not need to be fancy—just accurate. Over
time, that little habit can offer deep financial insights and guide better
decisions.
💸 2. Expenses: The Invisible Wealth Leak
Most people do not realise how much money slips through
their fingers every month. You may feel like you are spending ‘normally’—until
you actually write it all down. Expenses, when left untracked, are like small
leaks in a bucket. Over time, even a full bucket runs empty.
Start categorising your expenses: rent or EMI, groceries,
transportation, eating out, entertainment, subscriptions, education, personal
care. It may feel tedious at first, but within one or two months, you will spot
patterns.
And then comes benchmarking. For example, financial experts
suggest not spending more than 30% of your income on housing. Discretionary
spends (like shopping, eating out, etc.) should ideally stay under 20%. Once
you have your expense sheet in front of you, you can compare and adjust.
Tracking expenses does not mean you must stop enjoying life.
It just means spending with awareness, not guilt. It puts you in
control, so your money works for you—not the other way around.
How I Track My Expenses: From Rough Estimates to Real Insights
When I first started tracking my expenses, I only focused on
the major ones—like rent, utility bills, or big purchases. Daily spending was
often ignored. Back then, I used a very basic formula: Opening Balance +
Salary – Closing Balance. Since I was not investing much in the early
years, this gave me a rough idea of how much I was spending each month. It was
not perfect, but it worked—for a while.
Things changed with the rise of UPI and online payments. Suddenly, small and frequent transactions became the norm—morning coffee, cab rides, quick online orders—and they started adding up. Tracking expenses manually became almost impossible. That is when I decided to switch to a paid expense tracking app. While it comes with a small monthly cost, the clarity and structure it offers have been well worth it for me. I must clarify that I am neither promoting nor recommending this approach—this is simply a reflection of what has worked in my case. Please do not misunderstand this as advice; it is just an honest account of my current method.
Now, I can clearly see where my money goes, how my spending
patterns change over time, and where I need to cut back. The app helps me
categorise expenses, set limits, and even sends alerts when I am overspending
in certain areas. It has helped me make smarter financial choices without
feeling restricted. The biggest takeaway? What you do not track, you cannot
control—and when it comes to expenses, that could be the difference between
staying afloat and building wealth.
📈 3. Investments: Let
Your Money Work While You Sleep
Saving is good, but investing is where real growth happens.
But ask yourself honestly—do you know where all your investments are? Do you
know how much is in mutual funds, fixed deposits, gold, or real estate?
Many of us invest based on advice from friends or family, or
just to save tax. But if you do not track your investments, you may be
overexposed in one asset or missing out on better options. Some even forget
they had invested in something until the paperwork turns up years later!
Tracking your investments helps you see if your money is
growing and whether it matches your life goals. You can also benchmark your
performance. Is your SIP beating inflation? Are your mutual funds giving
returns in line with the market?
Without tracking, investing becomes like planting seeds but
never checking if they are growing. With tracking, you can water the right
plants and remove the weeds.
How I Track My Investments: Rebuilding the Past, Organising the Future
In the early days of my financial journey, I honestly did
not track my investments properly. I invested here and there—sometimes in
mutual funds, sometimes in insurance policies (Insurance is not an investment - I learned this hard truth later in life) or recurring deposits - but I never
maintained a record. Everything felt scattered, and I thought it was
manageable. But when I finally decided to streamline and take control of my
investments, I realised how difficult it was to gather all the scattered
pieces.
That is when I remembered the NSDL CAS (Consolidated Account
Statement) reports that I used to receive in my email and past statements from
my trading and Demat account provider. Fortunately, I had never deleted them.
One weekend, I sat down and started going through each report carefully. It
took time and patience, but I reentered all the past data manually and slowly
built a detailed investment tracker. That exercise taught me a lot - not just
about where my money was invested, but also about how much I had learned (or
ignored) over the years.
Now, I maintain a dedicated Google Sheet that gives me a
clear view of all my investments - by type, goal, and performance. It helps me
decide where to invest more, where to cut back, and whether I am on track with
my financial goals. The biggest benefit? Peace of mind and better
decision-making. It is never too late to take control—and starting with what
you already have is more powerful than it seems.
🌱💹 4. Returns: Are You Getting What You Deserve?
It is not enough to just invest. You must also check if your investments are delivering the right returns. This is your financial report card. Suppose you have invested ₹5 lakhs across different products - do you know how much you gained in the last year? Are your fixed deposits giving 6% while inflation is at 7%? Is your real estate value increasing or just sitting idle?
Tracking returns tells you if your money
is truly working for you. Benchmarking helps you compare it to market averages.
For example, if an equity mutual fund consistently underperforms while the
overall market is doing better, maybe it is time to switch.
Returns are not just about percentages.
They reflect whether your financial strategy is on track, or if it needs a
course correction.
How I Track My Returns: Still a Work in Progress, But Getting Better
When it comes to tracking returns, I
will be honest - this is one area I am still improving. I rely mainly on my
personal Google Sheet and the NSDL Consolidated Account Statement (CAS) reports
to get a broad view of how my investments are performing. These tools give me a
decent overview of returns from mutual funds, stocks, and other market-linked
instruments.
However, I know it is not perfect. Some
returns, especially from fixed income or alternative investments, do not
reflect clearly. The formats are not always straightforward either. That is why
I have made it a goal to improve this tracking system - so I can get a more
accurate picture of what is actually working and what needs to change.
The journey towards financial clarity is
ongoing. What matters is taking small steps to refine the process and get a
little better every year. Tracking returns properly helps avoid the illusion of
progress and gives real insight into whether your money is truly growing.
💰 5. Net Worth: Your True
Financial Score
Net worth is the final scoreboard; it is what you own minus
what you owe. It includes your savings, investments, property, gold, etc., and
subtracts all loans, credit card dues, or any other debt.
Unfortunately, many people never calculate it. But this
single number tells you everything. Are you growing your wealth? Is your debt
under control? Is your investment portfolio strong?
Tracking net worth regularly helps you see if you
are moving in the right direction. It also helps you set goals. By age 30, a
good benchmark is having at least one year’s income as net worth. You can also
aim for debt-to-net-worth ratio under 40%, and set goals for home purchase,
children’s education, or retirement.
Net worth is not just a number—it is your financial
health report. And just like your physical health, it needs regular check-ups.
Net Worth: My Personal Scorecard (Still Evolving)
For me, tracking net worth is like keeping score of my
overall financial health. I have built a consolidated Google Sheet where I try
to bring everything together. The good part is that my equity and mutual fund
investments tracking are now automated - I have set it up so that my sheet pulls in daily
updates, which gives me a real-time picture of my market-linked assets.
However, tracking fixed income investments is still a bit of
a challenge. Unlike equity, you do not always get daily or even monthly updates
for things like government schemes. So, while I may
not have every detail on a daily basis, I still manage to get a fairly accurate
picture of my net worth overall.
Maintaining this personal sheet has helped me tremendously.
It keeps me grounded, lets me reflect on my financial growth, and helps me make
better decisions about loans, insurance, or new investments. Yes, there is room
for improvement, but having a central place to track everything already puts me
far ahead of where I started.
Conclusion: Track, Compare, Improve – The Habit That Builds Wealth
Financial success is not just about earning more money. It
is about making the most of what you already earn, spend, and invest. And that
journey begins with two powerful habits: tracking your money and comparing
it with meaningful benchmarks.
When you track, you develop awareness. You start to see your
real financial picture, what comes in, what goes out, and where it all ends up.
When you benchmark, you gain direction. You stop operating
in isolation and start understanding how your finances stack up against healthy
standards. It is like turning on the headlights while driving - you can see the
road ahead clearly and avoid mistakes early.
And when you combine both, you gain something priceless: confidence
and control. You are no longer reacting to money problems after they
arise, you are proactively shaping your financial future with clarity.
Every small step, tracking your expenses, reviewing your investments, setting a savings goal - adds up. Over time, these small habits will help you make smarter decisions, avoid costly mistakes, and move steadily toward the life you truly want.
Getting Started: Build Your Own Tracking System
If you have not yet started tracking your financial or
investment activities, this is a good time to begin. You do not need anything
complicated—start with a simple spreadsheet or even a notebook. Begin by
recording the most basic information: what you did, when you did it, why you
did it, and what happened as a result. Over time, this habit will help you see
patterns, make better decisions, and stay more disciplined.
However, it is important to understand that there is no
universal format that works for everyone. Your goals, preferences, and the way
you interpret data are unique to you. That is why I strongly recommend that you
create your own tracking format from scratch. You can look at available
resources for ideas, but when you build your system yourself, you learn things
that no ready-made format can teach you. It helps you understand your process
more deeply and gives you a tool that fits you perfectly. I will be sharing a
basic, general format soon to help you take the first step - but I encourage you
to treat that only as a starting point and adapt it to suit your own needs.
What you build yourself becomes more than a tool - it becomes a teacher. Start with something basic, build what works, and improve as you learn
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