Net worth tracker: how to calculate yours and follow it over time
Your net worth is what you own minus what you owe. If you sold everything you have tomorrow and paid off all your debts, it's the money you would be left with. A net worth tracker is simply a way of recording that number over time. It's the figure that best sums up your finances, because it sees something your bank balance doesn't: someone with plenty in the bank and a larger debt can be worse off than someone with little and no debt.
The formula fits on one line:
Net worth = assets − debts
The work is in making the list complete. Here are the steps.
Step 1: pick a date
Take a snapshot of one specific day, such as the last day of the month. Every figure should be from that date, because balances and values change. If you always repeat the exercise on the same day, you can compare the results.
Step 2: add up your assets
An asset is anything that has value and could be turned into money. The usual list includes:
- Cash and accounts: everyday and savings accounts, and cash.
- Investments: shares, funds, pensions and retirement accounts.
- Property: your home and any other property, at what you could sell it for today, not what you paid.
- Vehicles: at their current resale value, which is usually well below the purchase price.
- Money you are owed: if someone is really going to pay it back.
Leave out everyday items such as furniture, clothes and appliances. They are hard to sell for what you think they are worth, and they only inflate the number.
Step 3: add up your debts
A debt is anything you would have to repay. Use today's outstanding balance, not the monthly payment:
- mortgage;
- personal and car loans;
- credit card balances;
- purchases on instalments;
- money you owe friends or family.
Step 4: subtract
Here is a made-up example with round numbers:
| Item | Amount |
|---|---|
| Accounts and cash | 12,000 |
| Investments | 8,000 |
| Home | 180,000 |
| Car | 6,000 |
| Total assets | 206,000 |
| Mortgage | 130,000 |
| Car loan | 4,000 |
| Credit card | 1,000 |
| Total debts | 135,000 |
| Net worth | 71,000 |
What to do with the result
If the number is low, or even negative, it isn't a verdict. That is very common early in a working life or just after buying a home. The number doesn't tell you whether you're doing well or badly. What matters is the direction.
That's why it isn't worth comparing yourself with other people's averages. Compare yourself with you a few months ago. If your net worth is going up, you are on track, even if the number is still small.
There are two ways to grow it: increase your assets by saving and investing, and reduce your debts. Paying 200 off a loan improves your net worth just as much as saving 200.
Notice, too, what changes nothing. Moving money from your everyday account to savings doesn't alter your net worth: it only changes where the money sits. Paying off a credit card doesn't either, because your balance and your debt fall by the same amount.
How often to update it
Once a month or once a quarter is enough. Checking it daily adds nothing, especially if you hold investments whose value goes up and down. If you aren't sure whether your pace is reasonable, start by working out how much to save each month.
How to track it without rebuilding the list
You can keep a net worth tracker in a spreadsheet: one row per asset or debt and one column per date. It works, as long as you update every balance by hand each time.
In abacova, balances come from your transactions, so you don't have to copy them across. You create one account for each place you keep money, and the dashboard shows your net worth, how it has changed and an Assets vs debts card. The net worth report goes into more detail, and reports are available on every plan, including the free one. The investments section follows shares, funds and other assets with their valuation, although it isn't part of the free or entry plans. You can compare them on the pricing page.
Where to start
Set aside half an hour, take today's date and make the list with approximate numbers. A reasonable estimate is far better than none. Write it down, repeat the exercise in a few months and compare.