Savings Tracker

Here’s an invaluable tool for calculating how much the savings of little actions are worth over time. See for your self the impact of actions, big and small – compounding with each new action and each new year. (Especially when invested in something like a broad based index fund!)

Green Geek savings tracker tool and future value of money with compounding interest calculator

Download link

Excel spreadsheet download for savings tracker and future value of money calculator  Download the Green Geek Savings Tracker spreadsheet

You can download a copy of the Savings Tracker spreadsheet tool above to get going calculating the savings from your own life changes and projects.

Helpful tips

The savings tracker spreadsheet is fairly straight forward to use. However, here are a few tips to get you going and ensure you get the most out of it.

1. Annual Interest Rate

Savings tracker annual interest rate field with a default of 7.0% average annual inflation adjusted returnThe slightly off to the side but probably most important field of the savings tracker spreadsheet is the annual interest rate. The default annual interest rate provided is 7.0%. Some may be surprised to see a number this high, as most “high interest” savings accounts get somewhere around nominal 1.0%.

However, what you really want to be putting into this field is the opportunity cost of your money; that is, the best return you could be getting on your money if you didn’t spend it now. Even if you’re only getting 1.0% in a savings account today, I would argue for most people this number should approximately 7.0%. Why 7.0%? Well, the annual average return of the stock market from 1926 to 2018 has been approximately 10% (technically the S&P 500 which is supposed to be representative of the overall U.S. stock market).

However, there has been average annual inflation over this period of time around 3%. When we’re doing far out calculations it’s vitally important to take inflation into consideration. You know how you hear about a chocolate bar costing a dime when our parents were growing up and now it’s a dollar? That’s the eroding power of inflation! $1 million 30 years from now isn’t nearly as great as it sounds, as it may only buy in the future what $500,000 can by today! (It’s fun to take a look at a historical inflation calculator to see the reality of an example like the above.)

Thus, we want to be using an “inflation adjusted” value so that we are comparing apples-to-apples when calculating our future dollars. That 10% average annual stock market return mentioned earlier, when adjusted for inflation, comes out to an annual inflation adjusted return of approximately 7.0%. And I would argue that 7.0% return is available to nearly everyone in the U.S. by buying a low-cost index fund that tracks the overall stock market (such as an S&P 500 fund or total stock market fund).

While past performance is never a guaranteed predictor of future performance in the stock market, it’s one the best guesses we’ve got. Therefore, that 7.0% is the number you’ll see me using for all future value rate of return calculations on this site and I think is a great default for almost everyone. One clear exception, however, is those that may be paying off loans with an interest rate higher than 7.0%. If you have debt at 9.0%, or credit card debt at 18%+, anything you save (and are able to apply towards that debt) will be saving you money at that 18% rate of return.

(As an aside but interesting element to keep in mind, at a 7% annual rate of return, your invested money will double approximately every 10 years, in accordance with the Rule of 72.)

2. Frequency

Savings tracker frequency field with daily, weekly, monthly, yearly, and one-time frequency optionsWith the savings tracker spreadsheet, you have the ability to add whatever dollar amount is most practical for you, and then choose the frequency at which you would have normally otherwise incurred this expense.

For instance, you may know the annual amount you were able to save off your insurance rate by making adjustments to your policy (even though you have a monthly insurance charge). So just go ahead and enter that annual amount and the total savings will reflect this benefit (and annual savings are treated as if the benefits are realized on a pro-rated monthly basis).

To get the frequency drop down choices, just click in the frequency cell and then an arrow appears to the right that will give you the various frequency options.

There is also a One-Time frequency option that is handy to track the benefits of those one-and-done savings. While normally not quite as exciting over the long term as recurring savings, these savings still add up, and a dollar saved today is worth 2 dollars in 10 years (at a 7% rate of return), so definitely still worth adding here.

3. Custom Savings Period

Savings tracker custom savings period field where any compounding period can be selected to see future savings valueThe spreadsheet comes pre-populated with savings calculations after 1 year, 5 years, and 10 years. There is an additional “Custom” period field on the right most side of the savings calculations (column J), which can be used to display the savings over any period you like. Simply set the number of years for the custom field in a box found further to the right (in column P).

4. Avoided Costs

Savings tracker avoided costs field to calculate the savings impact from purchases your avoided making or expenses you avoided incurringIt’s also worth pointing out there is an additional tab on the savings tracker spreadsheet called Avoided Costs.

The easiest savings to track are those expenses you were already incurring but have now reduced or eliminated from your life. However, as I was using this same spreadsheet to track the impact of my own savings, I realized there was a new type of savings in my life by generally being more aware of my regular spending and saving. Specifically, those expenses or purchases that I normally would have made, however, I instead consciously chose not to buy something.

I felt like that behavior, which is fundamental to getting a high savings rate (as well as in most cases minimizing our impact on the planet by reducing the materials, emissions, and waste from unnecessary purchases) should not go unrecognized. Thus, the Avoided Costs tab is much the same as the Savings tab, but is a separate space to track the impact of all those purchases not made!

That’s it! I’m always happy for feedback and ways to improve tools for use by others. So if you have some suggestions, please don’t hesitate to comment or contact me.

Download link

Excel spreadsheet download for savings tracker and future value of money calculator  Download the Green Geek Savings Tracker spreadsheet

 

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