Why You Need to Track Your Net Worth
What you track, grows!
For a long time, I did not think about the money in my bank account. I always had some in my account when I went to make a purchase, so my relationship with money was something I never questioned. This all changed when I got serious about my personal development.
In my mid-to-late twenties, I did not track my net worth. I was too busy completing two degrees, travelling and working internationally, and pursuing my athletic goals to track something I was not thinking about and I thought took a lot of time to calculate. As a result of a lack of tracking, my net worth flatlined and stayed the same. For many years, I had cash saved in my bank account, with no other assets, that did not shrink and it did not grow. Whatever I made, I spent, and there was little growth to my name.
When I began to look at the values and vision I wanted to create in my life, the quality of my relationship with my money kept coming up. I started to recognize that if I wanted to live a life of purpose with the goals I had, money was a key tool into creating that vision and I found out life can be expensive. If I was going to make my vision come true, I needed to make more money.
Since I began tracking my net worth, it has only gone up, so I am under the motto “What you track, grows!” I believe this to be true, when you track the right data, and ask the right questions, especially when it comes to our relationship with money.
Here are three reasons why you should track your net worth:
- You become aware of your relationship with your money. A key part of growing your net worth is to understand the quality of your relationship with money is. Is it healthy, or unhealthy? Is it improving and growing, or is has it been getting worse?
- You identify your assets and liabilities. Assets are things that make you money, and liabilities are things that take your money away. Once you begin to track the assets that you have creating cash flow, and the (hopefully) few that are taking your money, you are able to better see how the pieces of your finances fall into place. Remember, what you track, grows. This is your first step to tracking your net worth and is essential to moving it forward.
- You have the opportunity to create purpose with your money. Now that you know where you are using your money, you have to opportunity to align your financial habits with your life goals. I believe we all make choices each and every day on how to spend our money. It is up to us to choose to spend it aligned with our purpose, or not. When you reach this place of mastery, it is powerful.
I believe that tracking your net worth should be quick and easy to follow month-by-month with the aim of having positive net worth. To find my net worth, I calculate it on the last day of every month using this equation:
NET WORTH = (ASSETS) — (LIABILITIES)
My goal is to increase my net worth each and every month. Sometimes the increase will be large, and sometimes it will be small, but I am focusing on moving forward month after month, year after year.
Do you track your net worth? What are your financial goals? Let me know in the comments below and please watch the full video on our YouTube channel here:
