A few months ago I wrote a post on personal analytics. There I discussed how more and more people make their life decisions based on numbers. They don’t make their decisions based on what they feel but based on facts. This way their decisions are well-informed and based on strong foundations.

Things to track in your lifeHow can we apply personal analytics to our lives? The key is to track your life metrics. Only by tracking them can you get the numbers upon which to make informed decisions.

Unfortunately, the tracking process is still mostly manual these days (with a few exceptions like Nike+ that can automatically track your running speed and distance). Because of that, if you track too many metrics you risk spending too much time on the tracking process at the expense of doing real work.

So the best thing to do is to track just a few important metrics. This way you can get the benefits without spending too much time on the tracking process. Here are three essential things you should track:

1. Income and expenses

You should know how much money you make and how much money you spend on different things. Many people aren’t aware that they have financial problems until everything is too late. Or perhaps they’re aware, but they don’t know how it happened. Consequently, they have no idea how to solve it.

That’s why it’s important that you take note of your income and expenses. Doing that helps you spot the weak areas in your personal finance so that you can take the necessary actions.

To track your income and expenses, you can use a spreadsheet or a personal finance application. Here are a few personal finance applications you can use:

• Quicken
• Mint
• Wesabe
• GnuCash

One simple rule on money management that I find useful is to spend your money to buy assets whenever possible.

[1] [2] 下一页