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How to calculate your net worth (#MoneyFitChallenge #1)

January 7, 2021 //  by Lisa

Learn how to calculate your net worth. Tracking your net worth can improve your finances because it will motivate you to spend less than you earn, invest the rest, and avoid/payoff debt. These three strategies are the “Simple Path to Wealth” laid out by JL Collins. That’s the formula my husband and I used to become millionaires in our early 30s. Lastly, find out how I can easily check my updated net worth in less than 2 minutes.

how to calculate your net worth

 

Welcome to the Money Fit Challenge!

Calculating your net worth is the 1st step of the #MoneyFitChallenge. Join thist challenge to improve your:

  • Budgeting
  • Investing
  • Retirement planning
  • Creating a will, etc., here’s the link:

Improve your BUDGETING & INVESTING! Join the FREE #MoneyFitChallenge

STEP 1: Complete the Money Fit Challenge of the month:

JANUARY: CALCULATE YOUR NET WORTH

I encourage clients to update their Net Worth every month. Stick with me and I’ll be your nerdy friend who reminds you to check-up on your financial goals.

 

What is your personal net worth?

Net worth is simply the sum value of your assets (bank accounts, investments, property, etc.), minus your liabilities or debts (mortgage, student loans, unpaid credit cards, etc.).

how to calculate your net worth

 

Why bother tracking your net worth? You manage what you measure.

Budgeting is great (I’ll cover some tips next month), but Net Worth is a better measure of PROGRESS toward financial GOALS.

Updating your Net Worth will also MOTIVATE you better follow the 3 Keys from the Simple Path the Wealth:

  1. Spend LESS than you earn
  2. Invest the rest
  3. Avoid DEBT

 

Won’t checking all my accounts take too long?​

Here’s a tip for how to quickly UPDATE YOUR NET WORTH every month in 2 MINUTES OR LESS.

Personal Capital Net worth dashboard

It takes about 15-20 MINUTES to set-up now, but will have a BIG PAYOFF in the long run because it will:

  • SAVE TIME EVERY MONTH when it’s time to calculate your net worth.
  • Help you make MUCH SMARTER financial choices (Spend less, invest more, avoid debt)

​

HOW TO CALCULATE YOUR NET WORTH

1. Write a list of all your assets, accounts, and debts

how to calculate your net worth

 

2. Look up all their values individually -OR- Open a FREE Personal Capital account so you can check ALL your accounts at once with your own FREE Financial Dashboard (+$50 Sign-up Bonus with this link):

Sign up for your FREE Personal Capital Account Use this Money Fit Moms link: +$50 BONUS

 

Personal Capital is free, but here is my affiliate link: https://pcap.rocks/lisa03​

FYI: Sometimes Personal Capital makes you book an appointment to sign-up — you can book, cancel, and then book again at a later time if you want).

 

3. Link as many of your accounts as possible, so the values will update automatically.

Having a financial dashboard with all your accounts in one place will help you see the big picture of your financial situation.

​

NOTE: We’ll be using our FREE Personal Capital accounts again in June when we use their AWESOME (FREE) RETIREMENT PLANNER. It will help us calculate how much we need to save each year to get on track for our retirement goal.

​

STEP 2. CELEBRATE! 🎉

Don’t skip this step! Celebrating *rewards* your brain, so you’ll be more motivated to accomplish your NEXT goal.

Whether or not you’re disappointed or pleasantly surprised with your Net Worth . . . celebrating completing this challenge. Taking stock of a situation is the first step to improving it.

Celebrating calculating your net worth

 

Join the supportive @MoneyFitMoves Community! We’re on  Instagram, Facebook, and Pinterest.
Accomplish your financial goals faster! Join the FREE Money Fit Challenge!
Improve your BUDGETING & INVESTING! Join the FREE #MoneyFitChallenge

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I'm Lisa--a financial coach who wants you to feel the joy of financial freedom. Master of Accountancy.
I'm also a mom of three boys, a mental health advocate, and a lover of concerts, dance parties, and the great outdoors. Read More…

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