When presented with general concepts or rules of thumb relating to personal finance, my brain resists automatic acceptance. My look-under-the-hood tendencies rebel when I hear a statement like “it’s always better to invest rather than pay off debt” or vice versa.
To truly understand an idea (and prove or disprove its claim), I love to design a spreadsheet. Using this tool, I can break down a concept and illustrate how it works or demonstrate where it falls apart.
In this article, I’ll explain the basics of setting up personal finance spreadsheets, including how to design formulas with financial functions like PMT (payment), FV (future value), and PV (present value).