I am not a financial advisor. The material on this website should be used for informational purposes only and should not be used as financial advice or recommendations.
I have been on a debt payoff journey for six months, and at times it gets frustrating. Sometimes I feel that I am not making enough progress. But there are moments when I feel like I am going at a great pace.
I have been looking for a way to track my savings and debt payoff progress and recently learned about tracking your net worth. I want to share how you can track your net worth!
What Is Net Worth?
Net worth is the total value of an individual's assets minus their liabilities. It represents the amount of money someone would have if they sold all their assets and paid off all their debts.
- Assets = resources or property that have value that you own. Examples of assets include land, buildings, money, stocks, patents, and intellectual property.
- Liabilities = financial obligations or debts that a person owes to others. Examples include debts, loans, accounts payable, and taxes owed.
Why is Net Worth Important?
Net worth is important because it provides a snapshot of a person’s financial health by subtracting their liabilities from their assets. It can help you with financial planning, goal setting, and making informed decisions about investments, debt management, and saving for retirement.
How to Calculate Your Net Worth
To calculate your net worth, you need to add up all of your assets (such as cash, investments, and property) and then subtract your liabilities (such as mortgage, loans, and credit card debt). The resulting number is your net worth.
Net Worth = Assets – Liabilities You can use a spreadsheet or online tools to track changes over time and set financial goals. Regularly reviewing your net worth can help you make informed financial decisions.
How Often Should You Track Your Net Worth?
This will depend on your financial situation and how often you think that you should track your net worth. I have been tracking my net worth monthly because I am paying off debt and saving money. If there are no changes in your assets and liabilities, then you may not need to track your net worth as often as I do. Or you may want to track your net worth more often than me.
It’s Time to Get Financially Fit!
Now that you know what net worth is, how to calculate your net worth, and how often you can track your net worth, it’s time to get financially fit! This means transforming your finances so that you can reach your goals. To get to a place where you are no longer worried or stressed about money.
Please share this post with someone who is eager to get financially fit! Don’t forget to connect with me on social media: @thesavingbutterfly