- Net worth is the total value of all of your assets minus any outstanding debts.
- Tracking your net worth is crucial for gaining a comprehensive view of your financial health, as it helps to measure how much you owe versus how much you own.
- You can track your net worth easily with free tools like Mint or paid tools like Monarch Money or You Need a Budget. Check your net worth each paycheck to track your progress and create a positive feedback loop.
- By setting measurable and achievable net worth goals, identifying factors that impact your net worth, and tracking and adjusting regularly, you’ll be on your way to financial security and freedom.
Tracking your net worth is a great way to get a comprehensive view of your financial health.
It not only helps you to identify how much you own in assets versus how much you owe in debt, but it also allows you to track your progress over time and set realistic financial goals along the way.
But What Exactly Is Net Worth?
Net worth = Assets – Liabilities.
Essentially, it’s the total value of all of your assets (your investments, home, car, etc.) minus any outstanding debts such as student loans or your mortgage. In other words, if all of your assets were sold and all of your liabilities paid off – how much money would be left over? That’s your net worth.
In addition to helping you stay on top of your finances, tracking your net worth can also be an invaluable tool for gaining peace of mind, reducing stress, and achieving financial stability. By regularly monitoring your net worth, you can easily see how much progress you’ve made toward your financial goals, like maxing out your 401(k) for retirement or sending the kids to college.
In turn, this positive feedback loop creates an environment where the benefits of savings are magnified – leaving you feeling more confident in your ability to reach those long-term objectives and more likely to continue saving as you experience the benefits that come with it.
That’s a true win-win.
Your net worth is also a great indicator of your overall financial health. It will tell you how you are progressing toward your financial goals and help you stay on top of any red flags or adjustments you may need to make. Plus, it can give you a better understanding of what investments or big purchases might be the best use of your money, as you can see how they will directly impact your net worth.
Bottom line: tracking your net worth is essential for taking control of your financial health and achieving long-term financial stability. By having a clear picture of where you stand, you can make smarter decisions with your money and work towards a brighter future.
So don’t wait—start tracking your net worth today and begin taking steps toward improving your overall financial health!
How Do You Track Your Net Worth?
Fortunately, tracking your net worth is simple.
Intuit’s Mint and Monarch Money are two of the most popular automatic net worth trackers on the market today.
Mint is a great option if you’re looking for a free tool with ads that help keep it that way, while Monarch Money gives you an ad-free experience but comes with the added cost of a monthly subscription fee. Whichever option you choose, tracking your net worth will give you a much better sense of your financial health.
And fortunately, tracking your net worth with Mint or Monarch Money is a breeze.
Both services make it simple and intuitive to monitor your financial health. All you have to do is connect your accounts for an up-to-date, real-time synced view of your net worth or manually add them individually for a snapshot of what you own and owe. And if you prefer to manually enter the data, that’s ok. Just remember to update the information periodically to ensure that it remains accurate over time.
How Often Should You Check Your Net Worth?
The answer to this question can vary depending on how closely you want to track your net worth.
Some people like to check their net worth every few months, while others may prefer to do it more often.
I recommend checking your net worth each payday to get a snapshot of your net worth as money flows into your accounts.
Why? Seeing the incremental improvements can provide a great sense of accomplishment and help motivate you to achieve your financial goals! Additionally, by consistently monitoring your net worth, you’ll gain a sense of control over your finances which can reduce anxiety.
No matter which approach you take, consistency is key.
By making sure that your net worth is up-to-date and accurate and knowing where you stand, you’ll be able to stay on track and continue making progress toward your long-term financial goals.
Some additional benefits of monitoring your net worth are:
- It allows you to set and track goals: Tracking your net worth over time helps you to set realistic financial targets and measure your progress towards achieving those goals.
- It helps you assess your financial health: Keeping an eye on your net worth gives you a clear snapshot of where you stand financially, providing valuable insight into how healthy your overall financial situation is.
- It creates a positive psychological feedback loop: Regularly monitoring your net worth gives you insight into the progress you’ve made, which can create momentum and continued motivation to continue down the path to financial freedom.
Pro-Tip: Set Achievable Goals to Increase Your Net Worth.
Lastly, it’s essential to set achievable goals to increase your net worth.
Goals should be measurable, attainable, and time-bound. For example, it may be helpful to set a goal of increasing your net worth by $7.5k over the next 12 months by saving and investing 10% of your income each month. Or if you have credit-card debt, increasing your net worth by $7.5k by saving and paying down your loan balance.
The important part is that you have goals that are realistic and achievable.
It’s also beneficial to remind yourself of why you’re setting these goals in the first place – such as being able to buy a home, retire sooner, or having more freedom to make career changes – so that you stay motivated to reach them.
Are you ready to take control of your financial future?
Farnam Financial is here to help.
As a leading financial consulting firm, we specialize in designing powerful retirement income strategies for clients who are nearing retirement or are already retired.
And we’re offering a complimentary call to help get you started.
During this call, you’ll get a chance to speak with an experienced advisor and get unique insights about your specific situation. Through our work together, we’ll help you understand your retirement goals and how to achieve them, and we’ll give you a solid plan to execute.
Our proven approach has helped dozens of clients achieve financial success, providing them with peace of mind and the ability to live the retirement of their dreams.
But don’t wait too long. Take action now and book your complimentary call with Farnam Financial.
Don’t miss out on the opportunity to secure your financial future and achieve your dreams.
