Keep tracking your net worth is a very important step to managing your finances. In a single number, your net worth can measure your financial progress, whether you are climbing out of debt, building a wealth or both.
In this article, we’ll cover the best ways calculate and track your net wealth.
Then how can we calculate our Net Worth
Calculating your net worth is fairly easy. You can figure out your net worth in three easy steps.
Step one; Make a list of all of your assets. Add in the value of your house if you’re a homeowner. Include the amount of any cars you own. Plus, include all retirement accounts, savings and investment account balances. Also, don’t forget to add in any other larger value items such as bike, gold, luxury watches, etc.
Step Two; List all of your liabilities including debts. Include your home mortgage, any car debt, student loan or any there personal loans, revolving and other debt.
Finally – Step Three; Now it’s time to get your result. Subtract your liabilities from your assets. The answer you get is your net worth number.
How was your number? I hope it’s a positive number!
If you are wandering why it is so important to get to understand and know your net wealth!? There are two clear answers for this question;
First of all; by knowing your net wealth you will be able to have a clear picture on your current financial situation. Which in return will help you make the right choices which will benefit you financially in the future and being able to move to a higher positive number of your assets/liability difference.
Second answer; knowing your net wealth helps you to monitor the progress of the financial goals you’ve set. In addition of being a motivator for you to keep sticking to the plan and continuing to take steps to reach the financial goals.
Now you’re completely aware you current net worth & start seeing how your savings and current investment starts to payoff and getting you positive results which matches with your plan. Then this is the time to have an easy tools in plan to keep tracking of your Net Wealth.
We are living now in a technology era which results in making our like much easier and any information we need is just a double clicks away from us. With this I am sharing couple of apps & websites which will make is much easier for you’re to keep tracking of your wealth & the difference investment portfolio you are building.
- Personal Capital is a website that gives you numerous money tools to help you manage your money. And the best part that it’s FREE. With Personal Capital you can:
- Have access to all of your debt and asset accounts in one place
- Plan for retirement
- Monitor your investments
- Uncover hidden fees
- View, manage and categorize your expenses
- And more
You can use all of Personal Capital’s money tools for free. In addition, Personal Capital will help you manage your investments too. One of the most powerful feature of Personal capital is The Savings Planner feature where the app will show you an annual savings range that will project a 70% chance of reaching your retirement goals.
Another great online tool to monitor your net worth which been around for years now is Mint. Like Personal Capital, Mint is free to use. You can use Mint to track all of your bank accounts, investment accounts and more.
- Mint can help you categorize your spending and gives you an overview of all financials. Also, it will alert you to when bills are due. This way you’ll have advance notice, so you don’t miss a payment due date.
- Mint’s net worth tracker also lets you see fluctuations in your net worth over time. This feature will help ensure your net worth is growing as you desire.
Our last recommended online app is YNAB which is another popular site for tracking your net worth. However, its primary purpose is to help you budget. It has a system in place that will help you with three financial goals:
- Stop living paycheck to paycheck
- Get out of debt
- Save more money
I don’t care which application or website you decided to use but the mist important for me is to have your own way to keep tracking of your wealth including our expense, income & investments.
Even if you are not interested to use any of the online applications or websites you can still always go with the old way and use Excel or Google spreadsheets. It may be a little old fashion and time consuming, but it is an option for tracking your net worth. Although, using a spreadsheet definitely isn’t the most simple way to track your net worth. You’ve got to enter all information manually on a regular basis.
The most important takeaway here is to keep tracking your financial situation which will help you with cutting any unnecessary expense and accelerate your wealth building process while helps you with your financial journey.
If you will need ten easy ideas to help you increase savings, don’t forget to check out this article,