We have two Master documents that outline our finances – Net Worth Spreadsheet and the Money Field Manual.
The Net Worth Spreadsheet is a Microsoft Excel document that calculates our net worth. It is a monthly accounting of all of our financial accounts (banking, investments, … anything with a number) and excludes credit cards. It is the quantitative accounting of our finances and it includes our financial map.
The Money Field Manual is the qualitative explanation of our financial setup. It is a Word document that explains the purpose of each account, the point of contact, and how each of the pieces fit together.
Together, they will give you a complete picture of our finances.
The goal of this document is to act as my proxy if I’m unavailable (unreachable, dead, incapacitated, whatever). It’s taking all of the knowledge I have in my brain and dumping it into a document so someone doesn’t have to guess what I was doing. And it’s written in a way that is as basic as possible, making no assumptions.
What I call a Money Field Manual, my friend Chelsea of Smart Money Mamas calls an ICE Binder – In Case of Emergency Binder.
I already built mine (here’s what you need in an ICE binder) but if you haven’t and want a beautiful set of templates that you can take today and build an ICE Binder – get hers. It’s a great deal to have it all laid out in front of you in an easy-to-fill-out manner.
It has five sections:
Table of Contents
Net Worth Spreadsheet Legend
The Net Worth Spreadsheet is a pretty straightforward document as it is, but I figured anything is up for misinterpretation.
Plus, whenever someone will need this will be a stressful time… so let’s make it as simple as possible.
It explains how all the sheets are related, what updates where, and someone reading the document will be able to continue the accounting (not that they will). This also acts as a reminder for myself in case I forget how I set something up.
Bank Accounts
Someone looking at the spreadsheet and at our list of bank accounts is going to wonder why we have so many – but each has a purpose and it’s outlined in this section.
For example, we have a total of five banks but only three of them serve a function other than as a holding account (the other holding accounts still exists because I haven’t closed them yet). The page explains what role each plays.
One account is our brick and mortar account, another is a business banking account, and the last one is an online bank where we execute most of our transactions. That online bank is the hub in our financial network.
Investment Accounts
Unlike my bank account opening spree back in the days of Bargaineering, I only have two brokerage accounts and this section explains the purpose of each.
The investing strategy section is more detailed than the banking, with my target asset allocation as well as how those assets are distributed within each of the accounts.
I use Vanguard as one of my custodians and I have a Rollover IRA, Roth IRA, and a taxable brokerage account. One of the tricky things about those different types of accounts is that it’s often a challenge to get your asset allocation right. It’s even harder to reverse engineer what I was doing if you start with just the accounts.
The document explains what’s what. For example, I don’t put our bonds into our Rollover IRA, which is a tax-deferred retirement account. The general rule of thumb is that you put bonds in a tax-deferred account because bonds generate income and you’d be taxed on that income if it were outside of a tax-deferred account.
Bonds have had low yields recently and so it’s actually better to have stocks in those tax deferred accounts, but that’s not why we do it. If we needed to access our funds quickly, we’d liquidate our bonds first because they’re the least volatile. If they’re in tax deferred accounts, we’d take a massive penalty. That’s the #1 reason why… how it’s more tax efficient right now, due to low yields, is simply a bonus.
OK so that whole explanation is not possible unless I write it out in a Word document.
Direct Investments
For a while I made a few direct investments, or angel investments, in companies. I don’t do that anymore, that’ll be a post for another day.
This section of the document contains all the contact information of each investment, who was the lead investor, my relationship, who to call if you have a question (in case it’s not the lead investor), as well as anything else that could provide clarity on the deal.
The key here is that these are deals that don’t exist outside of legal documents. You can’t log in somewhere and see them. Without this and the listing in the spreadsheet, it would be difficult for someone piecing it together to even find them because they wouldn’t know where to look.
Insurance
Pretty straightforward here – a list of all the different insurances we have, levels of coverage, and the company we have them with. Ours are all with one company so it’s pretty easy to understand.
If yours is slightly more complicated, try to put in as much detail as you can. For example, if you have term life insurance from several companies (it’s not uncommon to get $1,000,000 from two companies at $500,000 each), list them and their details.
Lastly, remember to update it. That’s key. While having an outdated copy is better than having nothing, an updated one is best. I update the spreadsheet each month and anytime I have to remove or add a column, I make sure to review the Word doc.
Do you have a Money Field Manual or something similar?
How would you augment or improve mine?
Lanny says
Hai Jim, we have a similar document, but we just call it our Balance Sheet. But we may adopt your fancy name “Net Worth Spreadsheet Legend” ☺
One more document that we have is stating all of our financial information: our ID numbers, tax numbers, bank accounts, house, car, insurance, bank safety deposit information. Sometimes I feel that this document has too much information, but if my husband and I are “unavailable” at the same time, it would be easier for a person to handle everything.
I’m a very literal namer 🙂 — my first website, Bargaineering, was a portmanteau of Bargains and Engineering. 🙂
We have the same information but it’s a tab in our Net Worth Record spreadsheet, sometimes I forget. 🙂 It also has other useful numbers that aren’t always important (like bank routing numbers) but saves you a second when you need them.
Bearded Money Guy says
This is a great idea Jim. I’m an estate planning attorney and work really hard to try to get my clients to put together a record of their financial accounts. I see way too many married couples where one spouse handles all the finances and the other doesn’t have a clue. A document like this is extremely important.
Thanks for sharing – more people need information like this.
Thank you! I was showing my wife the net worth spreadsheet and I realized I was having to explain what things were, who were POCs, etc. So I wrote it all down. 🙂
Steve says
Where do you store this spreadsheet? Is it protected somehow? If someone were to hack into your computer and get access to this document, they could wipe you out. How do you keep that from happening?
I keep it hidden and secure. 🙂
Victoria says
How would you keep it hidden – I know how to add passwords but how do you hide it?
thanks
I use VeraCrypt to encrypt the volume so no one can access the entire drive.
Robbie D says
Do you have a sample of what your Money Field Manual actually looks like?
I would like to get one started but don’t know where to begin.
I am sure that I could begin filling in a spreadsheet or document if a sample was obtainable.
It’s literally just a Word doc with a listing of accounts, a brief explanation and a point of contact. Just start with the account categories and expand it from there.
Vince F Warner Jr. says
I have a portfolio account consisting of only Vanguard mutual funds including two 401(k)s and IRAs. I am within three years of retirement at 62. Up until now, I managed my own investments. Like you mentioned in one of your previous articles, I also use the free Personal Capital tool. I was looking at a low cost robo-advisor to help manage my investments . I really like Schwab Intelligent Income because of the human intervention CFPs and retirement planning services. Their expertiseand financial advice would simplify decision-making in my retirement and would benefit my spouse and family in the event of my death. My wife has no interest in educating or self-managing her future finances. However, I am not a big fan of buying and selling ETFs. I also looked at FACET Wealth as a possibility because they do not charge annual management fees and incur a flat fee. Do you recommend or approve of either organization for a dedicated CFP affordable service? In comparison, I like both much better than Vanguard’s Personal Advisory service
Did you try Vanguard’s Personal Advisory Service?