This personal finance spreadsheet changed my life

So I took one step with my personal finance that completely changed my life, and it all started with a spreadsheet. Over a decade ago, I used this spreadsheet to help me pay off my student debt, become financially independent, and build a life where money was no longer a constant source of anxiety. I want to share it with you today, explain exactly why it worked for me, and also share the personal finance advice that I got from Ramit Sethi that helped it all come together. It's not that complicated. There's no secret society of people who understand money and you don't, and you can live a rich life when you understand the basic language of money. This video is sponsored by Squarespace. Stick around and you'll see exactly how they helped me transform my online business. If you haven't heard my story before, I graduated with $100,000 in student debt and did the smartest thing I could think of at the time. I bought a brand new car and a leather jacket. I have zero regrets about the jacket. It took me a little bit of time to get my life together, but by far the biggest thing I did at the time was to create a spreadsheet. This spreadsheet. Okay, so if I'm being honest, there's nothing magical about this spreadsheet. It was just all of my debts and expenses collected onto a single sheet. There was one column for my various loans, one column for the total amount owed, one column for the interest rate, and a final column for the total monthly payments. And there was another section adding up all my monthly expenses. Rent, utilities, insurance, my gym membership, and so on. It's not the layout that made it so impactful, but the intention behind it. This was the first time ever, after years of avoiding it, that I finally got a bird's eye view of my finances and the mountain of debt that was standing between myself and financial freedom. One of the people that helped inspire me to get on top of my money problems and to pay off my debt was Ramit Sethi. Ramit is well-known in the personal finance world for throwing the traditional rulebook out. Instead of preaching frugality and penny-pinching, he's all about spending extravagantly on the things you love, as long as you cut mercilessly on what you don't. He can be a little bit blunt, and unapologetic, but he's helped millions of people take control of their money without feeling miserable in the process. I first met Ramit in the early days of starting this channel when I interviewed him in the kitchen of my Los Angeles apartment. But it was years earlier that his strategies on personal finance helped to shift my financial future. What do you think stops people from taking their personal finances seriously? Do you think it's overwhelmed? Is it too complicated? Are they ashamed of their Amazon purchase history? What do you think it is? The answer is yes. It's all of the above. Most of us have a true love-hate relationship with money. We love what we can buy. We love seeing celebrities in Bora Bora on a Tuesday. But we also hate people who make too much money. And we hate the idea of sitting down and learning how to manage money. And we all basically think that money is something that is too confusing for us. What I've been trying to do for the last 20 years is show people it's not that complicated. There's no secret society of people who understand money and you don't. It's actually pretty fun and you can live a rich life when you understand the basic language of money. Like many Americans, I was facing an uphill battle when it came to my finances because I was starting out in the hole. No, like a deeper hole. No, like really deep. Yeah, like that hole. Most graduates are a little bit smarter than me and didn't end up with a six-figure degree in videography, but as of the 2023 academic year, recent graduates who borrowed student loans still had an average debt of $29,300. And that doesn't take into account credit card debt or car loans, which are incredibly common in the U.S. If you're in a similar hole that I was, regardless of what got you there, there's no question that most people just don't want to address the problem. If you have debt, it's probably the thing that you think about every single day of your life. every time you go out to order pizza every time you are looking at your bills every time you pull out your phone it's like oh i shouldn't do this but i also want that coffee and it just tears us apart the good news is you can actually make a plan and if you have debt there are lots of strategies that you can use to pay it off sometimes years faster than you originally thought and what we can do is we can start at the beginning and say first of all where am i how do i stack up Second, where do I want to be? What is my rich life? It can't simply be, I want to get rid of this debt. That's not an end goal, getting to zero. And then third, we can start to make a plan for how we get there. Those three steps became so important to me as I started to get my finances together. Step one, where am I? Step two, where do I want to be? Step three, what's my plan? Now, my simple spreadsheet helped me tackle step one. After years of avoiding it, I had finally gotten clear on the problem and where I was financially. Now, step two. Whether you're investing in the stock market or paying off your debts, personal finance is just as much about psychology as it is about math. I remember throwing my finances into a calculator, a debt repayment calculator, and seeing that it would take me 30 years to pay off. a hundred thousand dollars a student debt like that i think for most people nobody has that amount of willpower what is the motivation that people could have to keep going even when it takes a long time okay this is a great question because now we're getting into the real practical human parts of it life is not about just plugging numbers into a calculator that's a lie That is how most people think about personal finance. They think we're robots. Oh, if I just plug these numbers in, then the formula will tell me what to do. Well, we're people. If we see something that's gonna take us 30 years, we're gonna get demoralized. Here's the reality. You cannot wait until you are debt-free to start living a rich life. The philosophy that I want you to embrace is I'm gonna live a rich life today and an even richer life tomorrow. And you can live a rich life even if you have debt. That's important to know. You can still eat out. You can still take an occasional trip. But what is important is you've got to know your numbers. And second, you've got to master your money psychology. That means I'm not a horrible person because I have debt. I made some decisions. They led me to being in debt. And I'm still going to enjoy myself now and even more later. So I wasn't just trying to get out of debt. I had a very clear vision of what I wanted my life to look like. I wanted to move out of my parents' basement. What can I say? I'm pretty ambitious. By the way, moving in with them in the first place was one of the smartest financial decisions I could have made at the time, but I was desperate to get on with my life. I wanted to connect with other creatives, make friends, have my own space, and honestly, most importantly, I wanted to go on a date because at the time, I was in a five-year dry spell. To do that, I knew that I needed to move to New York City. And New York City... isn't cheap. So saving and paying off my debt became my number one priority. Having this vision for what my life could be fueled me in those early years and became my biggest source of motivation. Every wedding and bar mitzvah that I filmed, every local TV commercial that I booked, all that money wasn't just helping me get to zero, it was helping me get one step closer to my dream. I checked off Ramit's first two steps, but I still needed to get that final one. I needed a plan. I want to take a quick moment to thank Squarespace, not just because they're an awesome platform that helps me run my business or the fact that they're sponsoring this video, but because last year when I was going through a really difficult time with my mental health, I reached out to Squarespace and told them I had to cancel all of our brand deals for the year. And not only were they incredibly supportive, sending me a heartfelt message, they also told me that whenever I was ready to start making videos again, They would be there to support my work. And I just think that's really cool and not something that you often see from companies. So I couldn't be more excited to partner with Squarespace again this year. I recently doubled down on how I integrate Squarespace into my creator business. And there are a few reasons why. First, they make starting incredibly easy. You could browse one of their beautifully designed templates. or use their new Blueprint AI website builder. Either route you go, your site is going to be responsive, meaning it's going to look good on desktop, mobile, or whatever device you use. Ease of use is super important for me when it comes to any tool I use, and Squarespace is known for its intuitive website editor. You can use their drag and drop interface to make quick updates without the need for coding or design skills, which is great because I am terrible at both of those things. Beyond that, Squarespace supports my business in other ways. They help manage my domains, host my site without worrying about bandwidth usage, and offer some amazing built-in tools from e-commerce to blogging and analytics. If you want to see for yourself why I love this platform so much, you can go to squarespace.com today to start your free trial. And then when you're ready to launch, go to squarespace.com slash Matt D'Avella to save 10% on your first purchase of a website or domain. Wow, I have not done that pitch in a while, but I nailed it. much like the rest of how i approach personal finance my plan for paying off my debt was very simple i would follow the snowball method the snowball method is a debt repayment strategy where you focus on paying off your smallest debts first regardless of interest rates while making minimum payments on all other debts once the smallest debt is fully paid off you take the amount you were paying on that debt and apply it to the next smallest debt creating a snowball effect the snowball method is something that by the numbers is kind of dumb. But in actuality, it does work for a lot of people. Why is that if it's not financially like the smartest decision to make? Most people are not robots. Most people get demoralized along the way. Most people need to see a small win because it's easier to feel good when you're getting wins versus waiting 28 years to see success. Now, personally, if I'm Being honest, mathematically, I would prefer to do the one where you pay off the high interest. But I also understand that some people need to find motivation by taking a different strategy. If it costs them a little bit of money, fine. We're not in a sprint, we're in a marathon with our money. So I want you to be able to adapt the lessons that I teach and make them work for you. I forget what finally triggered me to take it all seriously to begin with. I was probably just fed up with being overwhelmed and stressed out, but this spreadsheet was the starting point, and it soon became my to-do list. I logged into it just about every single day, even when things weren't changing, just to keep an eye on my goal. Each line I was able to cross out got me one step closer to my goal. to moving out of my parents' basement, to becoming debt free, to taking control of my life, to meeting Natalie. I chipped away bit by bit at my loans. Soon I was able to pay off my first one. And my total monthly payments went from about $750 to $615. And soon the snowball began to grow and grow. These were smaller, more realistic goals that I could work towards. And every time my total monthly payments went down, I got a massive hit of motivation that carried me forward to the next one. When I finally paid off my last loan, there was this immense weight lifted. After years of feeling trapped, I finally felt free. Thanks to Ramit for being so generous with his time. His new book is helping couples navigate their personal finances together. It's called Money for Couples. Sometimes you just gotta yell at people for them to understand.

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Here's the spreadsheet:
https://docs.google.com/spreadsheets/d/1eEJ9fYevSN9wKcqnM6QU4Nihdnq3SH7RcyKS1yb-sv4/edit?usp=sharing

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Hi there 👋 My name is Matt. I made a documentary called Minimalism that trended on Netflix a few years back and now I make YouTube videos. Please subscribe so my mother-in-law thinks this is a better career than being a doctor.

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