Stop What You’re Doing and Start Tracking Your Net Worth!

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Stop What You’re Doing and Start Tracking Your Net Worth!

Million Mile SecretsStop What You’re Doing and Start Tracking Your Net Worth!Million Mile Secrets Team

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Setting goals is an important step in achieving what you want out of life, whether it’s miles & points or your financial health.  But you’ve got to be able to measure your progress!

So I’ve asked Million Mile Secrets team member Meghan to share why she believes tracking your net worth is critical to achieving your personal financial goals.

Meghan:  Maybe your dream is to retire early, pay for your child’s college tuition, or reach financial independence.  Whatever the case, tracking your net worth will help you see the bigger picture.  And make those dreams a reality!

Stop What Youre Doing And Start Tracking Your Net Worth
Tracking Your Net Worth Will Help You Move Along on the Road to Financial Freedom

I’ll show you a couple of tools that will help you meet your personal financial goals.

Tracking Your Net Worth

Tracking your net worth will help give you a clearer picture of how your spending and investments affect your personal financial goals.

What Is Net Worth?

Assets – Liabilities = Net Worth

There you have it!  Things like savings, investments, and property count as assets.  And items like mortgages, student loans, and credit card debt are liabilities.  Subtracting the total of your liabilities from the value of your assets gives you your net worth.

Why Is It important?

It’s important to track your net worth because otherwise, you won’t know where you stand in terms of meeting your goals.

Plus, it can be really motivating to see your net worth number move up as you continue to make smart choices regarding your finances!  And seeing the bigger picture can help you get back on track if you’ve made a few mistakes along the way…like we all do. 😉

Tools You Can Use

1.   Personal Capital

I use Personal Capital to track my net worth.  It works by connecting to your banking and investment accounts.

I like it because it doesn’t take very long to set up.  Once you’ve inputted everything to the system, it’s automated.  And you can see everything in one place!

That said, you will have to enter your banks’ login information.

Some folks might not be comfortable with this.  But Personal Capital takes the security of their software very seriously.  And I’ve been using Personal Capital for 3+ years now and haven’t had any issues.

On your Personal Capital dashboard you can see things like:

  • Net Worth
  • Cash Flow
  • Spending by Category
  • Investment Portfolio Balances
  • Account Balances
  • Upcoming Bills
  • Investment Returns
  • and more!
Stop What Youre Doing And Start Tracking Your Net Worth
I Like Personal Capital for Its Ease of Use. Here’s a Generic Example of the Dashboard. You Do NOT Need to Be a Millionaire to Use the Program! 😉

From there, you can drill down into each category to see a more detailed view.  Plus, Personal Capital will help identify opportunities you might be missing out on, like investment accounts with lower fees or lower mortgage rates.

They even offer a free consultation with a personal financial advisor!  So you can chat with an expert about your goals and they can help you determine if you’re on the right track.  I took advantage of this perk when I signed up and found it very helpful.  It was nice to talk through things and bounce ideas around with a professional.

If you’re looking for paid asset management services, they offer that too.  And are known for charging low fees.  But I haven’t used that service, so I can’t speak to its usefulness.

2.   Spreadsheet

If you don’t want to use an online tracker, you can use a spreadsheet instead.

Spreadsheets can be great because you can customize them however you’d like.  And track whatever you want!  But unless you’re somewhat of a wizard in Excel, it will be difficult to get the pretty graphs that a program like Personal Capital offers.  Plus, you’ll have to input all of your information, and keep it up-to-date.

If you don’t want to create your own net worth tracking spreadsheet, there are plenty of free options online.  Like this Microsoft Office template or this Google Spreadsheets template.

How Financial Goals Relate to Miles & Points

There’s a strong connection between personal finance and the miles & points hobby.

If you can save money you’d otherwise spend on vacations by using the rewards you earn from credit cards, you can invest that money instead!  And the more money you can save, the closer you’ll be to meeting your personal financial goals.

Stop What Youre Doing And Start Tracking Your Net Worth
With Miles & Points You Can Travel the World and Save for Your Future at the Same Time!

Or, consider using credit cards that earn cash back.  Then investing the cash back you earn!

Either way, you’re working to make the most of each and every purchase!

Bottom Line

Tracking your net worth is a crucial step in reaching your financial goals.

It keeps you accountable.  And it keeps you motivated, too!  Because you can (hopefully!) see that line inch up and up towards your goal.

It’s a great way to visually see that spending less than you earn is worth it!

The specific tool you use is less important than just getting started.  So get going now and tweak your system later!

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Editorial Note: We're the Million Mile Secrets team. And we're proud of our content, opinions and analysis, and of our reader's comments. These haven’t been reviewed, approved or endorsed by any of the airlines, hotels, or credit card issuers which we often write about. And that’s just how we like it! :)

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Net worth is so important, so many people think only what’s coming in is their guide of wealth! I use quicken, so no one sees my data. But I did want to tell a funny story: when my daughter was about 10, she mentioned in passing that her friend was rich because they lived in a big house. After I shook off the horror of that comment, I sat her down and explained that the person earning $40K/year and spending $35K was a lot richer than possibly her friend, who’s parents may be making $1M/year but spending $1.1.M. She’s now a very frugal accountant!

Ha! I love it. And thanks for the tip regarding Quicken!

It’s amazing to me how much information we are willing to give an app or site these days, sometimes even pay to do so. I would never give someone all of that information about myself. Not so long ago, we didn’t even give out our SS numbers!

Agreed! Many of these apps, esp. the free ones, have embedded spyware. No thanks. All this can go in a notebook, like we used to do before relying on apps for everything.

Yes, it’s always important to do what you’re comfortable with. And I agree, Camilla, it’s amazing how quickly things have changed with technology!

Bank of America has a nice tracker

Great tip. Thanks!