0 Flares 0 Flares ×

Tracking your net worth is a highly useful way of measuring your financial progress month on month. The process itself is actually quite simple and once tracked it can be a great motivator for success. In this short guide, I’ll be giving away a Free Net Worth Calculator and will also detail the process of calculating your net worth.

Skip to the CalculationDownload Your Free Net Worth Calculator!

Tracking net worth isn’t just for wealthy kinglike beings that spend their time counting gold in their treasury. It is actually a very useful tool for monitoring your finances regardless of your age or financial situation. If you’re serious about taking your finances to the next level then you should consider net worth as an important metric to inform your long term progress.

Room Full of Gold

Tracking net worth not only gives you an indication of how much you have accumulated but also gives you insight into how fast you are improving this figure. For some this can be a reality check and for others… a challenge!

In This Guide…

What You Need To Know About Net Worth

Net Worth doesn’t care about your income. Which is great, as wealth is not about how much you earn, it is about how much you keep from what you earn. (Tweet This!)

In this respect, net worth can be one of the most accurate metrics to measure your financial status.

Calculating net worth for the first time is a great way to analyse where you stand with your finances. However, if you can track net worth over a number of months and years it will tell you even more…

Tracking net worth over time will give you an accurate representation of the rate at which you have improved your financial position in the past and where you are likely to be in the future. This can often often be a real shock but it is important to have the data at hand to further inform your life/finance decisions.

If the math is just too much, some wealth management companies such as Investment Quorum offer a ‘net worth analysis’ service to keep track of this for you.

How To Calculate Your Net Worth

Net worth is calculated by adding up all of your assets and taking away all of your liabilities. We’ll now go through a 3 step process to break this calculation down and give you an accurate measurement of your net worth.

Step One: Calculate Your Total Assets

The first step is to get together an estimated value of all of your possessions.

If you’re a homeowner, your biggest asset in terms of net worth is often your home. Houses frequently change in value so don’t just use the price that you originally paid for your house. Take a look at Rightmove to find similar sized properties in your area.

Unlike houses, car values depreciate in value over time. Look for similar model & age vehicles on Autotrader to get an idea of a realistic value of your car.

Here’s what you should look to include in your asset column:

+ Your House
+ Your Vehicles
+ Cash / Money in Current Account
+ Total Balance of Savings Accounts & ISAs,
+ Shares and other Investment accounts
+ Current Value of Your Pension
+ Money Owed to You
+ Other Properties (Real Estate)
+ Any other assets – This could include any valuable possessions such as jewellery, professional equipment or high value electronics.

Adding all of the above together will give you a figure for your total assets.

Step Two: Calculate Your Total Liabilities

The next step of this process is to add up all of the money you owe to various companies, organisations and individuals. This could include:

– Total Owed on Your Mortgage
– Total Owed in Car Finance
– Total Owed in Student Loans
– Total Owed on Other Mortgages (Buy to Let)
Credit Card Debt
– Any Money Owed on Other Loans
Any Money Owed to Family or Friends

Adding all of the above together will give you a figure for your total liabilities.

Step Three: The Final Calculation

The final step is to take your total liabilities away from your total assets: shown in the example below:

How to Calculate Net Worth

Your Free Net Worth Calculator

I’m very excited to be giving away this free template for both calculating your net worth and also for tracking it over time. Click the link below to get started!

Download Net Worth Calculator

Some Awesome Net Worth Resources

If you’re looking to explore the topic a little further, I’d highly recommend you check out the following resources:

http://mypenniesmythoughts.com/2014/08/tracking-your-net-worth.html

http://www.20sfinances.com/best-way-track-net-worth/

https://www.cashlady.com/blog/track-net-worth/

9 COMMENTS

  1. Hi Joe,

    Great introduction to calculating and tracking your net worth!
    I had a quick look at the spreadsheet and the only thing I can think of that might be worth adding would be some extra rows on both the assets and liabilities columns for extra property, for BTL landlords etc.
    Other than that, I dunno, maybe businesses owned (Hard to judge how much it would be worth until you came to sell, if that ever happened, so maybe worth keeping that sort of thing out of it)

    On a personal level, I wouldn’t bother adding Jewellery or electronics, mainly because I don’t own any worth much of anything, I think most consumer electronics nowadays depreciate at such an alarming rate it’s just not worth it. I guess if you owned some real high end stuff or some expensive jewellery, along with antiques, art, etc… then it’s worth adding it. Stuff you can sell if you ever wanted to sell it all and jack the day job in. 🙂

    • Thanks for taking a look! Have updated the sheet with some Buy to Let fields – great point!

      You’re right about jewelery, electronics, art etc. It’s rare these items have any notable value and even if they did it’s not often that we actually sell them. These items aren’t currently listed on my own net worth sheet but I imagine there may be a time where I do fill them in.

      Thanks for stopping by!
      Joe

  2. Hi Joe,

    Thanks for sharing this worksheet. I kid you not…….. I was panning on working out my Net Worth tonight. I told my other half, and wrote it down in my diary. Low and behold, I saw your post with the headline “How to calculate your net worth”. Have you been spying on me?! 🙂

    I’m pleased that the timing worked out the way it did as I don’t think I would have included some of the items you mentioned. Student Loan comes to mind!

    I also want to compliment you on the design of your Blog and your Posts. The layout, pictures, and tools you have look very professional. I have severe Blog envy!

    I’m not expecting a huge total for my net worth, but I’m hoping to track it for 2015, and set some goals too. Thank you once again for the assistance!

    All the best
    Huw

    • Hi Huw,
      Ha, great timing! Hope all went well and the spreadsheet helped!

      Student loans are interpreted very differently in the UK as it’s rare that we class them as a debt/liability. Whereas, in the states they are most certainly considered a debt!

      Thanks for your compliments on the redesign, still tweaking some elements so all feedback is greatly appreciated.

      Thanks for stopping by,
      Joe

  3. Joe, I just stumbled upon your website. I was just trying to educate myself about net worth and thinking about creating an excel sheet and this popped up! Brilliant timing. Thank you so much, it’s great. I would love to know how to create a graph like the one you have in there because I have no clue how to modify the one you have included in order to expand it. If you have a moment and are able to point me in the direction of how I can find out how to do that, I would be most grateful. I have no idea where to begin to even look.

    • Hi Siany,
      Glad to be of service, I still use this template to this day!

      If you’d like to add extra items to the table, just right click the relevant row and click ‘Insert’ > then enter the name of the item and figures. The totals should work themselves out 🙂

      With the graph, you should be able to change the names of the months and the amounts and the graph will react.

      Feel free to shoot any other questions through to [email protected] and I’ll do my best to help!

LEAVE A REPLY

Please enter your comment!
Please enter your name here