Hey hey, by assets I mean your properties, cash savings, investments, and retirement funds. This isn’t a dating site. Today’s post will be about the importance of tracking your net worth monthly. Budgets will help you control how you spend your money, net worth tracking will allow you to see how well you are doing, or not doing. It is a great motivator for you to do even better on your finances than you already are! On the flip side, if you aren’t doing so well, it’s a great motivator to straighten out your finances.
When I talk about net worth, the most basic definition is your assets minus your liabilities. Let me list out the most common ones.
Cash in checking and savings accounts
House or houses
Liabilities or Debt
Everything counts when you’re calculating your net worth! Even though you can’t touch retirement money until you’re old, it is still an asset that is yours.
So why track your net worth monthly? If you’re serious about saving money, then this is one great way to track how well you’re doing! Month to month you can see how much total debt you have and how much your assets are. If you are paying down debt, then you’ll get to see that debt go down while your total assets rise. It’s a great snapshot of how financially sound you are. Hopefully you won’t have a negative net worth, in which case you will have to work on making that a positive!
I was tracking my own individual net worth for awhile. Now that I’m married, my hubby and I have combined our assets and liabilities and our net worth. It’s good to see how our decisions affect our finances. It feels great when our net worth goes up. We can check our progress and see how well we do throughout the months. Progress!
To get you started, here’s a basic net worth template for you to use:
Net Worth Template
With this template, I’ve set it up so you can see progress month to month for each of your accounts. How much you saved in the last month, how your investments and retirement accounts have grown, and how much debt you’re paying off!
Do you track your net worth? Why do you do it?