by Ashley
I love a good budget! For years I used YNAB before moving over to EveryDollar. There’s something about the tangibility of seeing a budget laid out, moving dollars from one category to another, that really appeals to me. Every dollar has a job. Every dollar has a place.
I still use a budget to help identify areas where we may have experienced some bloat (like our food spending!) and to generally ensure we’re staying in control of our money. But recently, I saw an influencer mention how she tracks her net worth monthly, and it was a lightbulb moment – I need to do this!
I’ve talked about where we save and invest, how we’re planning to handle an upcoming raise, etc. So tracking our net worth seems like the natural next step. It gives a fuller picture than a budget alone and helps keep me motivated toward our larger financial goals.
Net Worth Tracking
I use the simplest definition of net worth: Assets minus liabilities.
For assets, I include all of our various accounts – from savings (Bank of America, Capital One 360, e-trade), to retirement accounts, mutual funds, and individual stocks (Fidelity, Vanguard, CashApp). I even include an estimate of our home equity.
For liabilities, I deduct our only two debts: our remaining mortgage balance and my student loan balance.
One big benefit of this approach is being able to clearly see progress over time and quickly spot any areas in need of rebalancing.
Rebalancing
When the stock market got a little rocky there for a bit, I didn’t pull any money out. But I did start funneling more money into high yield savings accounts instead of putting as much into stocks or mutual funds. That flexibility helps us ride our market fluctuations while still building toward our goals.
Goals
It’s no secret that I’ve talked about wanting to purchase a rental property. Right now we have a short-term goal to buy a small rental property in the next year or so to start us on our real estate investment journey. Longer term (more like 5-ish years), we’d like to either grow or reinvest by acquiring a vacation property. This might just be another purchase, or we might sell the rental and reinvest those funds into a vacation property. Then we can use it for short term Airbnb rentals and also enjoy it ourselves. And I think management will be easier once we’ve dipped our toes into the “landlord” waters by having an in-town rental as a first step.
Tracking our net worth – not just our monthly budget – helps me feel like we’re making progress toward these larger goals because I can see the funds growing that we plan to use for a home down payment and associated purchasing costs.
How We Track It
I use a super simple method to track our net worth: an Excel spreadsheet.
Each month is its own tab. On the first of every month, I fill in updated balances for all our accounts. That way, I can easily look back and compare across time.
One thing I do not include is our vehicles. I know vehicles have some value to them but, ultimately, they are depreciating assets. Rather than include them in our net worth and figure out how to devalue them every month, I just exclude them from our overall net worth financial picture.
I do include our home, though. For this, I look at the Zillow Z-estimate as a rough estimate of its current value (yes, I know it’s not perfect), then subtract what we still owe to calculate our estimated equity.
Why This Works for Us
I am a very goal-oriented person. When I was in the early days of debt reduction, I made visual signs (like a thermometer I’d color in) to track our progress. Now that debt payoff is mostly behind us, this spreadsheet of assets keeps me just as motivated.
Take May, for example. It was an expensive month! Our dishwasher broke (only 6 months out of warranty!) and the repair would’ve cost as much as a new one. My husband also needed an emergency visit to an oral surgeon for some ongoing dental issues. Between those two things, we blew past our monthly budget and had to dip into savings. That stung.
But when I updated our net worth spreadsheet on the 1st, I realized that even after those withdrawals, our assets still grew. That’s helped me stay focused and positive – we’re still on track!
It’s also easy for lifestyle inflation to creep in when you earn more. Budgets don’t always show how your investments are growing, beyond what you plan to invest each month. But net worth tracking makes it real. It helps me stay accountable and motivated to keep that number growing.
And honestly? It feels empowering to watch us inch closer to big goals like real estate investment and eventual retirement – something a monthly budget just doesn’t capture.
What Do You Do?
Budgeting is still a crucial part of our financial life. But for me, budgeting helps with short-term control (month to month) while net worth tracking shows our long-term trajectory.
I’m curious – do any of you track your net worth? Or is this a newer idea like it was for me? If it’s new, I encourage you to give it a try. It might be the motivational tool you didn’t know you needed. Let me know what you think!
Hi, I’m Ashley! Arizonan on paper, Texan at heart. Lover of running, blogging, and all things cheeeeese. Early 40s, married mother of two, working in academia. Trying to finally (finally!) pay off that ridiculous 6-digit student loan debt!
