All Financial Wisdom

Calculating Net Worth

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I was listening to one of bigger Pockets latest podcasts and one of their guests mentioned that he calculates his net worth every week.  He calculates his home’s present value, money owed on the mortgage, car loans, and the liking.  He started doing this in the years before mint.com, zillow.com, or other websites that might help him do that.  He said that by doing so, he could put his finances in perspective and had a constant reminder to save and invest rather than spend.

These days, you can check your home’s value using real estate websites like zillow.com or trulia.com.  Mint.com allows you to keep track of your other assets and liabilities.  You can import your account info for car loans, and it even estimates your car’s value using Kelley Blue Book. Mint also tracks your current account balances between your brokerage accounts and your various bank accounts, and even student loans.

Things to remember in you net worth calculation:

  • Present car value
  • Present car loan amount owed
  • Present home value
  • Present mortgage amount owed
  • Checking account balance
  • Savings Account balance
  • 401k account balance
  • Roth and traditional IRA balance
  • Free cash in pocket
  • Valuables (antiques, expensive china, gold coins, silver coins, collectables)
  • Bills outstanding
  • Present Credit card balance
  • Present home equity line of credit balance

 

4 Comments

  1. moneybaconguy

    April 19, 2015 at 11:10 pm

    I can produce IRA balances dating back to 2005 when I had less than $6k. I’ve tracked Retirement accounts almost monthly since then. With over $85k now reported, I will have to say that adding money to theses accounts, not recording the balances has helped me most.

    I am going to begin recording my net worth in April. I think it is good to have a clear perspective on your number. Even if it is negative it tells you where you stand. From there you can choose where you want to go and begin your journey.

  2. liberty1100

    April 20, 2015 at 12:31 pm

    I have heard similar advice as well when looking at the brokerage accounts. They say that the daily stress of seeing your account’s value reacting to the market increases your odds of selling during a downturn instead of sticking to the general “buy and hold” strategy.

  3. Steven Goodwin

    June 15, 2015 at 5:35 pm

    Watching your net worth month to month is a truly rewarding activity that shows whether you are doing good things or bad things with your money to grow your wealth! I have been tracking mine since 2010 and have watched it more then triple since I started! It’s been a blessing and a great way to keep me on track!

  4. A Frugal Family's Journey

    July 17, 2015 at 9:07 pm

    Although we only post quarterly results on our blog, we actually track our net worth each month.

    We just find it to be a good way to stay on track towards our goals. If we see a huge drop somewhere, we can address the issue sooner rather than later.

    AFFJ

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