Jan 06 2012

Do you calculate your net worth?

Do you calculate your net worth?

I do on occasion. I track ours with a private, anonymous account at NetWorthIQ to get a sense of where we’re at. In 2007, the first time I logged it, Shane and I had a combined net worth of $417. Woo hoo! In the black! Barely. I’ve only tracked our progress on occasion, but thankfully we’re on an upward climb.

I list our assets as:

Cash in savings. I don’t include what’s in our checking account, because that amount is usually allocated for bills or expenses of some kind.

Retirement accounts. We have 3 between us — Shane’s current 401k, his Roth IRA, my Roth IRA

Our 529 college savings plans.

Our two vehicles. I found the KBB value of each and listed it. Some people might opt not to include this figure. It’s up to you. It’s an asset that can be sold if need-be, but we don’t want to sell either car.

Our house. Since we closed on it in September 2011, I listed the price we paid. Hopefully it’s around the same price. In the future, I’m probably going to list the same price unless I have a good reason to list it as higher (say real estate in my area is up, or down). I think this is a hard figure to estimate without an appraisal or realtor input, and even then — it’s only worth how much someone else would pay us.

If you have other measureable assets, such as CDs, individual stock, or certain personal property you’d want to include, you can. The whole point of this exercise is to get a picture of your own financial situation and you can decide what you’d like to measure. I’m opting not to include any of our personal possessions because we don’t own anything of significant value. Just things that could sell at consignment, yard sale, or eBay if we wanted. Nothing to take to Sotheby’s, ya know?

I listed our debts as:

– Our remaining mortgage balance

Other debts, if you’ve got ’em. All credit cards, all car loans, student loans, personal loans, whatever.

Add the assets, add the debts, and subtract the debts from the assets to see where you’re at.

Are you happy with the result? If not, don’t despair. Use it as a starting point, and check your net worth in a few months to see how much you’ve improved. Maybe you’ve paid off some more debt, or built up more in savings. Maybe your retirement accounts improved.

One note — if you have retirement accounts in place (and I hope you do!), they very well could vary a bit depending on the market. Don’t get too caught up in this category, though it is worth it to make sure your retirement funds are allocated in a way that’s benficial to you.

As for me, I plan to check our net worth every few months. Some people like to update it monthly. Whatever keeps you motivated to make improvements.

I haven’t shared my net worth figures on here because well, I don’t wanna. I don’t know the benefit of me putting it out there, since this is not an anonymous blog. Still, if you have questions on where we’re at, say with retirement accounts or whatnot, you could email me and I’ll talk to you about it. Some bloggers like to be public with their net worth as it is motivational for people and that’s cool. I like to read other’s updates. I just don’t know if it would benefit anyone if I posted mine here. Maybe I should share percent change? Thoughts?

I plan to use our figure to compare ourselves to…ourselves. It doesn’t matter so much where other folks are at, because they have different circumstances. I think the main goal is that we all see it improving instead of getting worse.

How about you? Do you track your net worth? If you’ve never done it, do it and come back in the comments and share if it’s where you expected, or better or worse. Where do you hope to be in several months or a few years? Or, do you think tracking net worth isn’t helpful?

MORE:

See How to calculate your net worth, and why you should at ChristianPF

Trent at The Simple Dollar decides to keep his house out of the net worth equation

JD at Get Rich Slowly discusses “the most important number in personal finance” and explains why it can be dangerous to use this net worth figure to compare ourselves to one another.

See PT Money’s December net worth

See Jen at Master the Art of Saving’s January net worth. One of her assets is pirates gold. Interesting!

See JMoney’s latest net worth update. The dude is up $32k for the month. WHAT

See My Journey to Millions January update

See The Amateur Financier’s January update

See Punch Debt in the Face’s update and lol pic

 



7 Responses to “Do you calculate your net worth?”

  1. Mint.com will calculate your net worth for you if you have everything (including all debts and savings accounts) loaded into your account. Our mortgage debt has put us in the red to the tune of $100k. Pfft. Bummer.

    I think things like high mortgage debt and lower retirement savings automatically make most 20- or 30-somethings have a deceptively low net worth. Because of that, I prefer to track our progress without factoring in our huge mortgage debt. That thing isn’t going anywhere for quite some time, and there’s no sense factoring it in and bumming myself out. I prefer to look at the areas where we can make a real impact, like savings and retirement accounts.
    Karen´s last post ..2011 in photos

  2. Yeah I’m on the fence about including the house and mortgage. I think if you list it as an asset then yeah it should be on there as a liability, too…but I think it’s ok to just ignore it entirely if you wanna.

    I did list mine but I think it’s fine to not. Kind of a bummer to see that the principal improves by like $150 or something right now per month. But hey, progress!

  3. I have a spreadsheet that’s private that at the beginning of every year I update. It has all of our balances of checking, savings, retirement, etc. I just like to see how much it has increased each year. I don’t include the mortgage or cars, but that’s just me! :)
    Mrs. Money´s last post ..2012 Financial and Life Goals

  4. I’d love to triple our net worth in a few years, it’s not too much, so I’ve got a shot…maybe. Thanks for the mention. :-)
    Jen @ Master the Art of Saving´s last post ..$25 Amazon.com Gift Card Giveaway!

  5. I just calculated our net worth for the first time ever! I’m quite happy that I didn’t to this in years past (it would have been VERY depressing)! I included our mortgage/home value and our vehicles and we are in the positive! If I exclude both we are still in the positive, but not by nearly as much.

  6. I do think it is wise to be aware of the approximate amount of your net worth and the trajectory. Annual views are often fine I think. It isn’t the most important measure, but it makes sense to be aware. For example, if you have a stable job and are happy with your house (don’t plan on leaving) if you lose $100,000 in current valuation on your hose that really doesn’t matter much. Still over the long term this is an important measure.
    John Huner´s last post ..USA Adds 200,000 Jobs in December, Unemployment Rate Falls to 8.5%

  7. Kacie, you already know how I feel about this – thanks for the mention!
    Bob´s last post ..The Easiest Way Most of Us Can Save Thousands of Dollars – GS9

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Hey! I'm Kacie, wife to Shane and mother to Jonathan (7), Vivienne (5) and Amelia (2) . I write about my family's finance: how we save money, improve our spending, and plan for the future.

I hope I can inspire and encourage you to improve your situation. See disclosure.

I'm adopting a much slower-paced posting schedule, and treating this as a hobby blog now.

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