Sign up to save your podcasts
Or
Share Steps to Track Your Net Worth - Money Tip Tuesday
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
Steps to Track Your Net Worth - Money Tip Tuesday
Have you ever heard people talking about net worth and wondered what it means? Well, today, you are going to learn!
Links:
Transcript:
Welcome to Money Tip Tuesday from the Making Money Personal podcast.
Net worth! What is it? Why is it important to track? How do you find out what your financial net worth is? All valid questions, my friends. First, let's define what net worth is.
The dictionary defines net worth as "the total wealth of an individual, company, or household, taking account of all financial assets and liabilities."
Most people will agree that the definition of net worth is simply: assets - liabilities = net worth.
Now that we know what it is, why is it essential to track it?
Well, it allows you to see your financial situation at any point and whether your wealth is increasing or decreasing. Tracking your net worth is important because it gives you a clear picture of your financial health and can help you make informed decisions about your money. Please know that it is very possible to have a negative net worth. This means that you owe more money than what your assets are worth. We'll talk a little more about this later.
Now, let's take a look at how you can figure yours out. Are you ready? Ok... take out a piece of paper and a pen or pencil. Draw a line straight down the middle.
On one side, you are going to write the word assets, and on the other, write the word liabilities.
On the assets side, make a list of valuable items that you own… think bank accounts, investment accounts like 401(k)s, any real estate property that you may own, personal property such as cars, or other items that have value. Next to these items, write down their approximate value. Here is an example of what this may look like (we'll use easy round numbers for simple math):
Bank Accounts - $5,000
Personal Home - $300,000
401(K) - $50,000
Car - $20,000
At the bottom, you will write the total for all assets. In this example, we will have a total of $375,000. Nice!
On the liabilities side of your sheet, make a list of your liabilities. Liabilities are the debts that you may owe. Next to them, write the balance so again, for easy math, in this example, we will do
Mortgage - $210,000
Credit Card Debt - $5,000
Auto Loan - $10,000
Student Loans - $50,000
And that Home Equity Line of Credit you took out to fix up your house - $40,000
At the bottom, you will write the total for all liabilities. In this example, we have $315,000. Ouch!
Now, we have the numbers we need to calculate net worth. Remember, net worth equals assets minus liabilities.
In my example, the assets total $375,000, while the liabilities amount to $315,000, resulting in a total net worth of $60,000. Not too shabby.
Let's say you calculated yours, and you didn't like what you got. You got a negative number. This means that your debts exceed the value of your assets. Let's flip my example and say you have a negative $60,000.
Do not get discouraged. Many families and individuals are right there with you. According to MarketWatch, one in five Americans has a zero or negative net worth.
You're not alone in this journey. Instead of dwelling on it, get motivated to get that number into the positive. You got this!
Here are a couple quick tips on how to improve your net worth:
For Triangle members listening to this episode, we actually have a lot of cool tools available within our online and mobile banking platform to help you track net worth, pay down debt and set savings goals.
Check out Money Management within online and mobile banking to track your net worth as it grows, set budgets and even debt payoff goals.
We also have a tool called Goal Builder that helps you set up and track savings goals within your Triangle savings accounts. This is great if you’re looking for an easy way to save more for emergencies, a new car, a house downpayment or any other long or short term goal.
Alright, that's going to do it! I hope you learned something new today, and we've given you the motivation to look into your net worth and grow your wealth! Remember, it's never too late to start building your financial future.
If there are any other tips or topics you would like us to cover, let us know at [email protected]. Like and follow our Making Money Personal FB and IG page and look for our sponsor, Triangle Credit Union on social media to share your thoughts.
Thanks for listening to today’s Money Tip Tuesday and check out our other tips and episodes on the Making Money Personal podcast.
Have a great day!
View all episodes
By Triangle Credit Union
5
1515 ratings
Have you ever heard people talking about net worth and wondered what it means? Well, today, you are going to learn!
Links:
Transcript:
Welcome to Money Tip Tuesday from the Making Money Personal podcast.
Net worth! What is it? Why is it important to track? How do you find out what your financial net worth is? All valid questions, my friends. First, let's define what net worth is.
The dictionary defines net worth as "the total wealth of an individual, company, or household, taking account of all financial assets and liabilities."
Most people will agree that the definition of net worth is simply: assets - liabilities = net worth.
Now that we know what it is, why is it essential to track it?
Well, it allows you to see your financial situation at any point and whether your wealth is increasing or decreasing. Tracking your net worth is important because it gives you a clear picture of your financial health and can help you make informed decisions about your money. Please know that it is very possible to have a negative net worth. This means that you owe more money than what your assets are worth. We'll talk a little more about this later.
Now, let's take a look at how you can figure yours out. Are you ready? Ok... take out a piece of paper and a pen or pencil. Draw a line straight down the middle.
On one side, you are going to write the word assets, and on the other, write the word liabilities.
On the assets side, make a list of valuable items that you own… think bank accounts, investment accounts like 401(k)s, any real estate property that you may own, personal property such as cars, or other items that have value. Next to these items, write down their approximate value. Here is an example of what this may look like (we'll use easy round numbers for simple math):
Bank Accounts - $5,000
Personal Home - $300,000
401(K) - $50,000
Car - $20,000
At the bottom, you will write the total for all assets. In this example, we will have a total of $375,000. Nice!
On the liabilities side of your sheet, make a list of your liabilities. Liabilities are the debts that you may owe. Next to them, write the balance so again, for easy math, in this example, we will do
Mortgage - $210,000
Credit Card Debt - $5,000
Auto Loan - $10,000
Student Loans - $50,000
And that Home Equity Line of Credit you took out to fix up your house - $40,000
At the bottom, you will write the total for all liabilities. In this example, we have $315,000. Ouch!
Now, we have the numbers we need to calculate net worth. Remember, net worth equals assets minus liabilities.
In my example, the assets total $375,000, while the liabilities amount to $315,000, resulting in a total net worth of $60,000. Not too shabby.
Let's say you calculated yours, and you didn't like what you got. You got a negative number. This means that your debts exceed the value of your assets. Let's flip my example and say you have a negative $60,000.
Do not get discouraged. Many families and individuals are right there with you. According to MarketWatch, one in five Americans has a zero or negative net worth.
You're not alone in this journey. Instead of dwelling on it, get motivated to get that number into the positive. You got this!
Here are a couple quick tips on how to improve your net worth:
For Triangle members listening to this episode, we actually have a lot of cool tools available within our online and mobile banking platform to help you track net worth, pay down debt and set savings goals.
Check out Money Management within online and mobile banking to track your net worth as it grows, set budgets and even debt payoff goals.
We also have a tool called Goal Builder that helps you set up and track savings goals within your Triangle savings accounts. This is great if you’re looking for an easy way to save more for emergencies, a new car, a house downpayment or any other long or short term goal.
Alright, that's going to do it! I hope you learned something new today, and we've given you the motivation to look into your net worth and grow your wealth! Remember, it's never too late to start building your financial future.
If there are any other tips or topics you would like us to cover, let us know at [email protected]. Like and follow our Making Money Personal FB and IG page and look for our sponsor, Triangle Credit Union on social media to share your thoughts.
Thanks for listening to today’s Money Tip Tuesday and check out our other tips and episodes on the Making Money Personal podcast.
Have a great day!