How do you track your net worth update? What is net worth and why is it important to ensure you are tracking it regularly? These are some of the questions I have received since sharing this post on why you should know your net worth. These are all good questions which I hope to cover in detail in this post and hope it adds value as you continue to manage your money whether you are paying off debt or building personal wealth. Since starting my YouTube channel, I have enjoyed sharing financial content both on this website and on my channel.
Net worth definition (according to wikipedia) is the value of all the non-financial and financial assets owned by an individual or institution minus the value of all its outstanding liabilities. Essentially, your net worth is a financial planning tool that helps you understand how much you have in assets and how much you have in liabilities. When people are in debt, they don’t often feel the need to track their net worth but I think it is still important to track even then. They’re many ways to track your net worth update, you can do this electronically or you can do this with pen and paper and personally I use both options.
Disclaimer: I am not a financial advisor, all opinions shared in this post are my own.
How to track your net worth update
When I was in debt, I decided for the first time (in 2013) to calculate my net worth and I realised I had no assets i.e. no savings, I was renting and didn’t have a car. So my net worth was automatically a negative number because I was in debt. What boosted my mood every time I checked my net worth was seeing the negative number go down as I inched closer to a positive number. I tracked my net worth in a small note book and every month when I repaid towards my debt, my net worth increased. When I finally paid off my debt and I started saving, (in 2016) I finally started seeing a positive net worth and this made me really happy.
When you are paying off debt whether its student loans, credit cards or car loans but also have assets like own your home and have savings its the perfect combo to track your net worth. Seeing the net worth build up to a positive number as you pay off your debt actually motivates people to get rid of the debt and focus more of saving money which in turn improves your net worth. Don’t think of a net worth update as a vanity number but as a guide as to how you are doing financially, seeing which debt you should focus on paying off first and how you can best improve your savings or investments if you have any.
Below is how I track my net worth update:
- Emma – this is an app that I downloaded it has both free version and paid version and I am using the paid version. This app has an option to track your net worth and if you connect your current and credit accounts it will include that information in your net worth update. What I love about using the EMMA app is that I can see a live update on my net worth and I can update as frequently as I need.
- Excel trackers – I use a lot of trackers when it comes to managing my finances and I use a tracker to track my net worth updates. Whilst I record in my trackers monthly, I actually share the net worth updates quarterly on my YouTube channel and you can check out the latest update HERE.
- Pen & Paper – whilst I don’t do this much anymore because I have too many things to track but this is also a great way to track your net worth update. For those who choose to use paper and paper, make sure when tracking your net worth on the last day of the month or first day of the new month.
Tracking your net worth update is important for understanding your personal finance management especially if you are looking to build personal wealth, live below your means and make your money work for you. Let me know below how you track your net worth update and why you track your net worth?
Njkinny says
I am learning to be better at my financials this year and this is new to me. I’ll try it out and learn my net worth. Never thought this was this useful. Thanks for sharing!
Rebecca Smith says
This is really helpful – I always wondered how people tracked their net worth! I definitely need to start tracking mine!
Christiana says
This is interesting. I have never heard of it before, neither have I tried it but now that I know better I’ll begin to look into getting my network out and tracked as well.
Shilpa Bindlish says
I am currently learning to use investment apps. Probably in a few days, I will also be able to calculate my net worth.
A Nation of Moms says
I have never done this before. Thanks for the information – it is something I will have to try!
Rosey says
My mom always used pen and paper. When she passed I found years and years of records where she recorded everything, including net worth. She should have been a bookkeeper somewhere! She was thorough and very good.
Romy says
Important to track you assets and liabilities as a way to track progress. Thanks for the tips
Alexis says
These are great tips, I’ve never stopped to track our net worth.
ashley t says
I have never done this but it sounds like I need to start doing it.
emman damian says
Gosh! I haven’t thought about updating and tracking my net worth. Maybe I should start doing it. Maybe add it to my financial goals?
Elise Ho says
It is very important to be fully aware of your financial future. It is in this that we can plan well.
Ivan Jose says
I honestly have not been doing this exercise lately. I need to be more mindful of my expenses because everything is uncertain during these times.
Samantha says
This is such great advice. And I totally agree, I think being aware of your numbers helps motivate you to keep working on them!
Elizabeth O says
Knowing and tracking your net worth is so important. It helps you manage your money well and helps you know where you’re putting your money
Brianne says
Pen and paper is the best for me to track my network. I have tried excel spreadsheets before but I still go back to pen and paper
pacioalita9 says
I also use Emma. It is such a great app to track your net worth
Gervin Khan says
This is nice, I don’t really calculate mine but I guess I should start doing it now. Calculating it seems gonna help me in the future.
Ramil Hinolan says
I always follow this formula: Earnings = Savings + Expenses. To do this, you must determine how much to save for the month, then deduct the amount to the total earnings. The remaining amount is alloted for the month expenses.
Kat&Beyond says
Net worth is the single most important financial metric one can track. It’s more important than a person’s salary or monthly budget. It represents the sum total of your entire financial life, Thank yo for this because honestly, i never calculated mine properly.