Tracking Your Net Worth

A few weeks ago I wrote about the importance of a budget.  The next step is to track your net worth. Net worth is comprised of all your assets and liabilities – similar to a corporate balance sheet. Your assets will be any cash, investments, and real estate you own.  Liabilities will be any loans with balances. Assets minus liabilities equals net worth.

I track my net worth in Excel on a quarterly basis.  Most investment firms send out quarterly statements so I transfer the totals from the statements to my spreadsheet. Since September is the last month of the 3rd quarter, now is the perfect time to start putting together your own file. Here’s a template of the file I use.

Investments Template 2015

There are tabs for the investments and liquid assets, which provide information regarding how well your investments are doing.  Any other assets (e.g. car or house) will need to be manually entered.  Car values can be found on the Kelly Blue Book website. House value can be determined using the latest valuation or by using Zillow.

Liabilities should be manually entered onto the summary tab as well. These are the outstanding balances on any loans you have.  The Net Worth column is a formula that deducts the total liabilities from the total assets.  The higher the number, the better.

Over time, you should see your net worth rise as you increase your assets and decrease your liabilities. If you’re not seeing this, your lifestyle and budget should be reevaluated to get on the right track.

How does your net worth look?  Does it fall in line with what you’d expect, based on your budget?