One of my graduate school professors was fond of reminding his students not to resort to “belly financing.” Belly financing is when you make a decision based on what your gut is telling you. Too often, we are guilty of managing our personal finances according to “belly financing” simply because we do not have the tools available to make a more educated decision. Fortunately, with the publication of Manage Your Money and Investments with Microsoft Excel by Peter G. Aitken, we now have the tools required to make informed decisions regarding our personal finances.
Manage Your Money and Investments with Microsoft Excel covers a large range of personal home finance topics including:
• Understanding and Tracking Your Net Worth
• Budgeting
• Understanding and Managing Your Checking Account and Credit Cards
• Mortgages – From Home Equity Loans to Escrow Accounts
• Renting vs. Buying a Home
• Leasing vs. Buying a Car
• Understanding and Tracking Your Investments
• Planning for College and Retirement
If the word Excel sends shivers up your spine, have no fear. Aitken has devoted the first three chapters to explaining Excel. His explanation starts with the definition of a cell and continues through to the explanation of basic financial calculations. If you already know that a cell is the intersection of a row and a column then you might want to fast forward to the basic financial calculations chapter. However, if you thought a cell was the concrete floored space in a jail, don’t skip the first chapter.
Each chapter provides an understanding of the topic, along with the appropriate Excel worksheets on the accompanying CD. However, Aitken does not leave you wondering how to use the worksheets; instead, he provides complete details regarding the intricacies of the worksheet and how it can be applied to your situation. Each worksheet comes in two versions. One version contains sample data that allows you to experiment and see how the worksheet functions. The second worksheet is empty and ready for you to begin using immediately. All of the worksheets are complete with the necessary functions and fields, however, they are also easily modified for your specific situation.
One of the topics rarely addressed in home finance books is that of escrow accounts. If you are in the process of obtaining a mortgage, you simply must have a good understanding of the escrow account. We often assume that the mortgage company will handle the escrow account and as a result believe that we do not need to get involved regarding the details. This assumption could not be further from the truth. In reality, the mortgage company does set up and maintain the escrow account but too often it is not accurate. As Aitken points out, “Mortgage companies have been known to make errors and – guess what – they are never in the customer’s favor.” In addition to explaining an escrow account, an Escrow Cancellation Calculator is included. This calculator will determine exactly what the financial benefits are in canceling your escrow account. Yes, you can cancel your escrow account; read chapter 11 to help determine if this might be the right decision for your situation.
An example of the worksheets and calculators that can be found on the CD are:
• Net Worth Calculator
• Payoff Calculator
• Mortgage Points Comparator
• Home Equity Line of Credit Calculator
• Mortgage Refinance Breakeven Calculator
• Rent versus Buy Calculator
• Lease or Buy Calculator
• Mutual Fund Comparator
• College Savings Calculator
• Retirement Planner Workbook
Aitken has also included a helpful glossary of financial terms in the appendix, as well as a searchable electronic version of the complete book on the CD.
Whether you are a beginner or intermediate user of Excel, you will be able to use this book to manage your personal home finances. The author’s expertise, along with Que Publishing’s reputation for releasing quality material, makes this book a solid investment.
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