Tracking Your Net Worth, And Why You Should
It is a common belief that tracking your net worth should only be done if you are a successful businessperson or a high-flying celebrity, but this couldn’t be further from the truth. It can allow you to manage your personal finances and stay on top of your income, savings, and credit score, just to name a few. Continue reading to find out how to track your net worth and familiarise yourself with the benefits of doing so on a regular basis.
It is a great indication of your overall wealth
When it comes to assessing your personal finances, there are several different factors you must consider including your income, net worth, and credit score. In order to paint an accurate picture of your overall wealth, however, net worth is the metric you should be focusing on. It may make you feel good to look at your assets, but in order to put them into perspective, you must also look at liabilities. If you are struggling to know where to begin, it may benefit you to input your finances into a net worth calculator.
It can allow you measure your success
By tracking your net worth on a regular basis, you can be motivated by your past successes and put plans in place to achieve your short-term and long-term goals. If you are heading in the right direction, for example, you can be reassured you are doing something right. If progress is slowing, on the other hand, it may be worth finding out why and altering your strategy as necessary going forward. This can be done by implementing a series of financial tools including downloading a money transfer app or experimenting with multiple banking.
It can highlight the importance of investing
If you have dabbled in investing, you may find your net worth fluctuates on a daily basis. This can be a great way to find out how successful your investment endeavours have been, and which have made the greatest contribution to your net worth. By tracking your net worth, it can highlight the importance of investing, with how you manage your money arguably more important than how much money you make.
How can I find out my net worth?
You can find out your net worth by subtracting your liabilities, or debts, from your assets.
How often should I track my net worth?
There is no universal answer when it comes to how often you should track your net worth but quarterly is a great place to start.
Which investments will increase my net worth?
You can increase your net worth by investing in real estate, for example, or by limiting your liabilities.
If you are considering tracking your net worth, it may benefit you to know that doing so can be a great indication of your overall wealth, can allow you to measure your success, and can highlight the importance of investing. When it comes to taking control of your finances, there is no time like the present.