Knowing Your Net Worth
This number can feel like a big deal, but it can also be a big motivator.
Do you know your net worth? Have you heard the term tossed about but figured it only applied to the millionaires and billionaires of the world? Are you wondering what the heck I'm talking about?
Net worth is actually a pretty simple concept: add up all of your assets, then subtract all of your debts. That's your net worth. Now, before you panic, most people just starting out after college have low or even negative net worth numbers, and it's not (necessarily) something to panic about.
No matter what your number is, I encourage you to track your net worth over time. Now, maybe you're wondering why you'd want to remind yourself that you've still got a long way to go, but trust me - watching that number grow is big motivation to keep it growing. Hitting those first milestones - getting a positive number for the first time after you pay off those student loans, ten grand, fifty grand, six digits - it's exciting, and it's something I see my clients take pride in when they do track that number.
New technologies make it even easier than ever to watch your number grow. Our clients can track their net worth in our eMoney software that we provide, and other tools like Mint.com will also keep a running tally. Of course you have to be honest and link all of your accounts - good and bad - to get an accurate calculation.
Anytime you set a goal, I'm a big believer in finding motivation wherever you can. For me, watching my net worth increase has been a huge motivating factor as I've worked toward my own financial goals. If you're having trouble finding motivation, give this method a try for a while. Still struggling? Give us a call. We're always happy to sit down and help you set realistic milestones, find ways to stay on track, and help hold you accountable as you work toward the future you dream of.