When it comes to personal finance many of us are essentially playing the game without tracking our score.
Picture a ship sailing the ocean without charting it's course. How can the captain determine progress of the trip? How can he tell if they're headed toward the destination?
This is what many people are doing while sailing their financial ship of life.
Tracking Net Worth
The funny thing about tracking net worth is that it's literally one of the easiest financial tasks you can do!
Let's break it down real quick:
- Assets minus Liabilities = Net Worth
What are those things?
If you are wondering what an asset or liability is, let me give you some quick examples.
Assets:
- Home
- Savings
- Investments (stocks, bounds, crypto, etc)
- Vehicles
Basically anything that holds a value.
Liabilities:
- Debt (mortgage, credit card balance, car loans, etc.)
Basically anything that you owe on.
Example of Net Worth Spreadsheet
As you can see in the example above it is a simple calculation that can be thrown into a spreadsheet.
Tracking Progress
I personally try to update my spreadsheet once a quarter, but even semi-annual will do the trick. This allows enough time for so actual movement in the number and is still frequent enough to see if your financial ship is still on course.
Best Regards,
Your ScaredyCatGuide
