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It’s my first net worth report of the new year – the first year I’ve started out with zero debt since before buying our home a little over five years ago. It’s so hard to believe that on this day last year I released our very last net worth report that contained a liability!
But wait, if you’re not sure what a liability is or how to even calculate your net worth, I’m going to take a minute to go over that.
If you’re already familiar with all of that and just want to see our numbers for this month, keep scrolling!
According to Investopedia, “Net worth is the amount by which assets exceed liabilities. Net worth is a concept applicable to individuals and businesses as a key measure of how much an entity is worth. A consistent increase in net worth indicates good financial health; conversely, net worth may be depleted by annual operating losses or a substantial decrease in asset values relative to liabilities.”
To put it simply, your net worth is just the value of your assets minus your liabilities.
Assets may include your home, vehicles, investments, money in your bank accounts and cash. It can even include the value of your art, jewelry, furniture, etc. I don’t include any of those things, however, simply because I do not want to take the time to add up the value of each little thing we own.
A liability is the amount of debt you owe on these things. My husband and I no longer have any debt, but you could take a look at January 2018’s report (which I may add is extremely short for some reason). This is the last month where we had a mortgage balance, so when calculating our net worth, I subtracted our balance of $7,945 from our home’s value of $144,000.
My preferred method of keeping track of our net worth is by using Personal Capital. If you’re unfamiliar with this service, I’ll talk about it below.
Other than Debitize, this is the only financial tool I frequently use that I haven’t come up with myself (such as my free zero-based budget template). Some prefer using spreadsheets to track their net worth, but Personal Capital is so quick and easy to use that I’ve just never felt compelled to put one together. Plus it’s free!
Personal Capital is an app that updates your net worth upon sign-in by connecting to your bank accounts, investment accounts and even Zillow, though I found that Zillow’s estimated value of our home fluctuated wildly almost month-to-month. Connecting your accounts is optional, so this is not something you have to do if you don’t feel comfortable with it.
It is good to keep in mind that some companies do not allow third parties to have this sort of access to their information, and because of this, I have to log into my husband’s retirement account and manually update the value on Personal Capital. Also, to get a good idea of the value of your vehicles, I recommend checking kbb.com and manually updating those amounts when you log into Personal Capital.
They are now offering a refer-a-friend program for their free service, so it’s a great time to try it out. If you use this link and connect a qualifying investment account (taxable brokerage, 401k, IRA, 529, etc.) with a balance of over $1000 within 30 days of signing up, you and I both will receive a $20 Amazon gift card!
- Cash: $26,362
- Investments: $78,750
- House: $150,000
- Vehicles: $10,929
Net Worth: $266,041 (+$5,953 from last month)
The value of our investments began dropping in September, but since we started our $100,000 savings goal on September 1, we are still consistently increasing our net worth each month, if only by a little bit. If you’re interested in learning more about our current savings goal, click here.
I’d love to be able to compare numbers from earlier in our journey, but I unfortunately just never felt compelled to track it until over a year into our marriage.
Even if you choose to just track your net worth every three to six months instead of monthly like I do, I really suggesting starting now. Watching your numbers increase as you pay down debt and begin to save money is awesome motivation, and it’s great to be able to look back and see all the life you lived through those numbers.
Using Personal Capital turns this into a pretty convenient, passive process. If you need help getting your account set up or with calculating your net worth, feel free to reach out to me in the comments below or on Instagram.
Thanks for reading. See you soon!