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Having “The Talk” About Making Your Money Work Harder: Part 5 – Net Worth

Welcome back to our five part series on making your money work harder! This series is part of a BIG conversation I had with J where we talked about other ways to invest his money beyond the Bank of Mom.

In part 1, we talked about savings accounts, in part 2 savings bonds, in part 3 CDs, in part 4 stocks and today in part 5 we’ll wrap up our discussion with keeping track of your net worth.

Paying attention

It sounds a little pretentious, doesn’t it? Keeping track of your “net worth.” Like something only rich people do.

But think about this. If you go on a diet, do you log your meals and calories? What about if you’re training for a marathon? Would you write down your runs and workouts? And if you want to cut back on social media? Would you track your time?

I believe that paying attention and keeping track is vital in any area of your life that you want to improve.

A few years ago when I started to get my financial life in order, someone on Reddit recommended the Mad Fientist’s financial independence spreadsheet. So in March of 2016, I downloaded a copy and made my first entries.

I still keep track every month, and my net worth has increased by 66%.

66%?!?!!!

In less than two years.

66% is WELL beyond the rate I earned anywhere else by far.

Our spreadsheet (is awesome)

Like I said, I’ve only been recording the balances across all of my accounts for about two years. As time passes and I collect more data, I’m able to see where I’m making progress.

Imagine if I had started when I was 9.

To that end, I created a simple Google sheet for J. There’s a column for each month, a row for each account and some totals at the bottom. His has the following rows:

  • Cash in saving
  • Cash in spending
  • Cash in giving
  • Local bank savings
  • Online bank savings
  • Current value of savings bonds
  • Current value of CD
  • Current value of stocks at Stockpile
  • Current value of college fund

Not including the college fund, he has over $2,000.

Having a few dollars here and there is good, but seeing the sum total can be powerful.

Filling in the spreadsheet each month is easy and only takes about 10 minutes. We also get 10 minutes of talking time while we’re filling it out, which is important.

(On our first round of entries, I threw in a mini-lesson about liquid assets — money you can get your hands on quickly vs. illiquid assets — money you can’t get to quite as easily or there’s a penalty to get and why those terms are important. Always with the lessons!)

Everyone is doing it

In addition to the Mad Fientist who I mentioned above, there are other personal finance bloggers who believe in the power of keeping track. Bill at familyfinancefavs.com takes a more in-depth approach with his teens. Jim at wallethacks.com talks in detail about how they keep track of their net worth. And Kathryn at makingyourmoneymatter.com not only has a ton of classes, but one specifically for creating a net worth statement (and they’re free).

Our spreadsheet is super easy and compact, but you’ll find their examples to be a bit more comprehensive. You can also customize your spreadsheet (if you choose to do one) to track whatever you like in any format you like.

Do you track your net worth? Have any spreadsheets or tips and tricks you want to share? Leave a comment below!

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