How To Start Tracking Your Net Worth Every Month

Grab your favorite drink, budget for an hour, and get started.

1. Download this spreadsheet template https://t.co/JP4JGpiPbi

2. CASH - list your bank accounts. Add the closing balance of the previous month for each of your accounts. Add cash closing balance or ignore it if the value is small.

3. INVESTMENTS - List your assets. Overwrite the list in the spreadsheet or add more rows if needed. Next, add the closing market value (as of the last day of the month) for each investment. If you don’t have the closing value for the month, use today’s value and complete it. Remember, this is the market value and not the value at which you acquired the asset.

4. RETIREMENT – List down your retirement assets, pension funds, etc. Add the closing value for the previous month.

5. LIABILITIES – List down the liabilities and their closing values in the cells.

6. FIXED ASSETS – List the fixed or immobile assets and their latest market value. I only record property and ignore all other fixed or immovable assets. Also, I don’t update the market value for property every month unless I intend to take any action on fixed assets.

7. Now you should be able to see some important numbers:

i. Liquid net worth (Cash + Investments - Liabilities) and your total Net worth (Assets - Liabilities).

ii. Allocation of each financial asset as a percentage of the total.

8. Set a target for your allocation and write down one action point for the next month as a comment.

9. Your goal is to gradually move the allocations towards an ideal percentage to improve your net worth over time.

10. Repeat 2 to 6 at the end of every month.

The key is to get started and refine every month.