Why you should track your net worth (and how)

One number.

Easy to calculate.

Fun to watch grow.

One of the most important parts of money management.

If you’ve never calculated your net worth, do it today!

Here’s how…

Assets – Debts = Net Worth

It’s that easy.

It takes less time than working a monthly budget.

The tools we use to track our net worth

When we first started tracking our net worth we used pencil and paper for the first few months. It worked great and it felt good to be so closely involved with our money.

Then we started using a spreadsheet.

Now we use two tools…

  1. Tiller
  2. Personal Capital

I use Tiller to track our net worth by hand. 

Each month when we use Tiller to track our spending and work a monthly budget I always calculate our net worth too. I like doing it by hand because I feel more connected to our money that way.

I then follow up with Personal Capital to make sure all the numbers match up.

Personal Capital pulls data from each of our accounts into one place and shows us our net worth automatically. (Well, almost… There’s one account that won’t link correctly for some reason but it’s easy to punch in that one number by hand!)

Why you should track your net worth

1) Motivation: Seeing your net worth grow (even if it’s negative!) is super motivating.

There’s a results-focused message attached to your net worth. It’s the best way to see results. It’s like your money is giving you feedback on how your actions are impacting your money. Budgets and tracking your spending are great, but they don’t display results in the same way that your net worth does.

2) Puts a bow on top of everything: Money can sometimes be frustratingly fluid. It’s always flowing and changing.

A budget is more of a living document than a conclusive one. Calculating your net worth puts a period at the end of the sentence. It puts a cap on that months money comings and goings. It marks the end of that chapter. I personally find that comforting because, like I mentioned, your money is constantly shifting and having something solid and conclusive to point to feels nice.

3) Results of your efforts: I’m guessing you are paying off your debt, tracking your spending, and working a budget so you can make some progress! Tracking your net worth allows you to see the results of all your efforts. And it’s outrageously fun.

Tracking for beginners

If you’ve never done this before and those tools I mentioned sound like a scary monster, do this…

Download this free networth tracking spreadsheet and fill it out.

No pressure. I get that if it’s your first time you might not feel qualified and that’s okay. You aren’t going to mess up or break anything. Just do it.

You’ll feel so much better after you take the first step.

How has tracking your net worth helped you grow your money?

4 Responses to "Why you should track your net worth (and how)"

  1. Joe   March 28, 2017 at 11:16 am

    Tiller sounds interesting. I put everything on the spreadsheet manually and it works very well for us. I’m not sure if putting it on auto would help. It’d be easier, for sure.

    Reply
    • Derek   March 29, 2017 at 1:16 pm

      Love to see another old-school spreadsheeter. (Yes, “spreadsheeter”)

      I like Tiller because it pulls the transactions automatically but leaves it up to you to take it from there. So, it’s not on auto-pilot, it just does the work of pulling everything over. From there you (quickly and easily) categorize each transaction to track spending and work a budget. I LoooOOOooove Tiller. 😉

      Reply
  2. Ms. Montana   April 5, 2017 at 10:02 am

    We track all our spending/giving in GoodBudget and I use an old fashion excel spreadsheet for our net worth. Although I only peek at the net worth every 6 months or so (give it a chance to make some progress!) =)

    Reply
    • Derek   April 5, 2017 at 10:09 am

      You really can’t beat a spreadsheet. Apps and tools and stuff are just glorified spreadsheets. 😉

      Reply

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