A couple of months ago I came across a great post by budget on a stick where he introduced the concept of a Money Map. He defines it as a “chart that shows you where all your money is coming in and going out“. In theory, this should be super simple but it will ultimately depend on your understanding of how your money flows through the various buckets you’ve created as part of your financial strategy.
My Financial Money Map
I’m a visual kind of guy so building my own financial money map represented a neat challenge to be a part of. I didn’t know how or where exactly to begin so I decided to conduct a sticky note exercise on a wall in my home office. The wife freaked out with all the yellow on the wall but once I explained what I was doing, she was onboard and cool with my approach.
By the time I was done, I realized it was gonna be difficult to take a picture of my sticky note plan (and be able to understand all aspects of it) and post it directly on the blog. Unfortunately, I had no choice but to translate it into a flowchart created in Microsoft Visio which surprisingly came out better than I had anticipated but definitely not as flashy as Lily’s from the Frugal Gene.
I was not anticipating any shocking surprises; however, I have to admit my money map has lots of buckets and therefore increased complexity!. Before you start thinking how in the world I can keep up with this insanity I need to give all the credit to my good old friend Automation.
On my financial money map, all the solid lines represent transactions that are fully automated whereas dashed lines are discretionary. Visually, my money map might seem complicated and perhaps overwhelming to some but the only thing I can say is that it works for us :).
Building Your Own Money Map
- Start with all the money coming in. In my case, the green boxes capture my paycheck, bonuses (annual), rental income, dividends and peer-to-peer lending. If you have other sources of regular income feel free to include those as appropriate.
- Include accounts where money is sent to. We have two checking accounts (primary and secondary) that source the majority of all other buckets.
- The next step is to understand your spending habits and know where your money is going. You can download the statements from all of your accounts and dump them in excel or you can be more efficient and use the free services of Personal Capital and/or mint. On my map you can see money going to tax-deferred accounts (yellow), expenses (gray) and other places (blue) for short and/or long-term growth.
- Please be careful with the amount of information and detail you include on your financial money map. You definitely do not want to expose yourself to hackers looking to capitalize on your good intentions.
Join The Chain Gang
As I initially mentioned, the post on budget on a stick was fundamental in my desire to put my financial money map together; however, I also need to give credit to Apathy Ends as the idea was also theirs. I hope you join other bloggers and create your own Money Map.
- Write a post in which you create your own map, explain how you did it, and talk about anything you discovered about your finances using the map.
- At the bottom of your post link back to the other bloggers before you in The Chain.
- When you tweet out your post tag the other bloggers. (You may have to do a few replies to your post as the chain gets bigger)
- Try to keep your list of chain members up to date. This helps encourage others to keep their back-links up to date and in turn, helps you.
The Official Money Map Chain Gang:
Anchors: Apathy Ends, Budget on a Stick
- The Luxe Strategist
- Adventure Rich
- The Frugal Gene
- Working Optional
- Our Financial Path
- Atypical Life
- Eccentric Rich Uncle
- Cantankerous Life
- The Retirement Manifesto
- Debts to Riches
- Money Metagame
- I Dream of FIRE
- Stupid Debt
- Spills Spot
- Making Your Money Matter
- Life Zemplified
- Trail to FI
- The Lady in the Black
- Smile & Conquer
- Her Money Moves
- Full Time Finance
- Abandoned Cubicle
- Freedom is Groovy
- Millennial Money Diaries