Happy late Valentine’s Day!
This was mine and my husband’s fourth Valentine’s Day together. Since we would rather celebrate days that have more meaning to just us (birthdays and our anniversary), it’s a pretty frugal and easy-going holiday for us. It’s become our tradition that he comes to see me at work with brownie batter donuts and a card. There’s really nothing more I could want than to see him and eat donuts, so it’s perfect for me.
To be honest, I was more excited that Valentine’s Day meant it was now the middle of the month, which means it is time to put together February’s Mid-Month Net Worth Report!
These monthly reports began in the summer of 2017 after I read The Millionaire Next Door by Thomas J. Stanley, Ph.D. and William D. Danko, Ph.D. I learned that if I am serious about building wealth and becoming a millionaire, I need to start consciously working to improve our net worth now, and the obvious first step is to track it. You can view that first net worth report here!
If you’re not sure what net worth is or how to track it, I’ll take a few moments to cover that information. If you know the drill and just want to see this month’s numbers, feel free to 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.”
Fancy jargon aside, your net worth is simply 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., and as I was asked one time – yes, it can include the value of your guns! I don’t include any of those things when calculating ours, however, because I just don’t want to take the time to add up the value of each little thing we own.
As for a liability, it’s 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/service that updates your net worth upon sign-in by connecting to your bank accounts, investment accounts
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: $32,691
- Investments: $82,920
- House: $150,000
- Vehicles: $10,862
Net Worth: $276,473 (+$10,432 from last month)
This has been our largest increase yet! So, how did we have an increase of over $10K in one month? Though we lost a little in the value of our vehicles, which is pretty steady month to month, we had pretty good increases in our cash value and the value of our investments.
Cash: +$6,329 from Last Month
The increase in cash accounts for most of it. Last month was an “extra” paycheck month for my husband and me, so we saved much more toward our current $100K savings goal than we’re usually able to in one month. For more info about this goal, click here, and for a breakdown of our savings in January, check out last month’s savings report.
Investments: +$4,170 from Last Month
The rest is due to an increase in our investments (finally!). Our current investments include Roth IRAs, my 401(K) and my husband’s pension plan. My employer’s 401(K) match of $1,077.72 was just deposited last week, which makes up a chunk of this increase.
It’s been a year since I calculated our net worth without any liabilities for the very first time due to paying off our house, and our net worth has since increased by $43,401 (view the report here). I admit that I wonder how much of an increase we would have seen if we hadn’t celebrated for seven months instead of saving money, but I have no regrets. Money is to be enjoyed too!
I have now been calculating our net worth monthly for a little over a year and a half now, and it has increased by $81,992 since that first report in July 2017!
It’s crazy how it doesn’t seem like we’re progressing very much day to day or week to week, but looking back at the past year and the past year and a half makes me realize how awesome we really are doing.
No matter which step of your unique journey you’re on, I highly recommend tracking your net worth. You may not want to because you know your net worth is in the negative right now, and you know it will be hard to see that number. But it won’t be that way forever. You will be so glad to watch yourself get closer and closer to $0, and to be able to look back later on at how far you’ve come.
Personal Capital makes it super easy to track your net worth for the very first time, and monitoring it from there is even easier.
Do you track your net worth? Comment below with any questions you may have!