It’s probably no surprise being a financial blogger, but I am kind of obsessed with my finances. I enjoy budgeting, and budget (i.e. track my expenses against my goals) at least several times per week. I stay on top of my credit cards, their balances and their rewards. I often check my investment accounts and watch my mutual funds go up and down. It’s a bit exhausting, and sometimes I worry if my constant checking is making me a bit paranoid and taking away some of my happiness in life. One of my new year’s resolutions this year was to only check on my finances once per week, but that didn’t really work out.

One of my friends was telling me about how he had started tracking his net worth, and how once a month he would login to all his account and record his balances, in an effort to see how is doing overall. That was pretty intriguing to me, and I also found that a couple of other financial bloggers were doing it to. I decided to give it a shot and have been doing it for 9 months. I’ve really enjoyed it and have found it to be helpful for a number of reasons. I thought I’d walk through the process and talk about my experiences in tracking my net worth. Although I’m still a little obsessive about my finances, I will say that I have done a lot better about worrying less about them.

How I do it

The way I track my net worth is relatively simple and low-tech; I use an Excel spreadsheet. I also go low-tech for my budgeting process and use Excel for that too. You can actually download my templateif you’re interested from the site. I find that having to manually put everything in forces me to pay more attention to it, and that’s arguably the goal of a budget. Other sites like Mint.com almost make it too easy in my opinion, and I fear that because it does most of the work that I would pay less attention to it.

For my net worth tracking spreadsheet, I have a bunch of different columns representing each of my assets and liabilities. I’ve got my checking, savings, retirement, personal investment accounts, and my house. (It may be a shock but we actually don’t have student loans or car loans…we were aggressive early on and paid off the student loans and always try to pay cash for our cars). You may have other assets/liabilities like other debt, or other investment type accounts. You’ll list them all out in the columns of the spreadsheet, and then each month record the balances of each. I find that once a month is plenty, there won’t be all that many changes week to week, so checking monthly makes the most sense. From there you’ll start building the spreadsheet out and over time hopefully be able to see some positive trends! It takes me probably 15 minutes each month, so not a huge time commitment at all. There are probably some higher tech options to track net worth, but I find a spreadsheet does the job just fine.

Now that you know the ‘how’ of tracking, let’s get into the benefits that I’ve seen from tracking my money.

Worry less

As mentioned in the start of the article, I started this process with the goal of reducing my angst around my finances. Personally for me this was something I wanted to work on as I try to put my faith and trust in God, rather than my money, and found myself trusting more in my money. I was hoping to change that by tracking it over time, which would give me more confidence and cause me to worry less. 9 months in, I do find myself worrying less, as I know the overall status of my finances and trust that things will be ok. I still check on things pretty frequently, but it’s now more like once or twice a week, rather than once or twice a day. Generally knowing my balances and overall status has instilled in me confidence that I am ‘doing well’ and could weather a financial storm if needed. Overall I’ve definitely worried a lot less since tracking my net worth!

Confidence

Along with worrying less, I find an increase in my overall confidence level. I’m much more confident when I spend money, as I know that I will be fine with this month’s budget, that I’ve got savings in the bank, and that my retirement is growing. I have less guilt over impulse or other purchases. I also have confidence for bigger purchases or investments that we may decide to make. For example, Mrs. Money wanted to go to grad school, and we felt confident in our overall financial health that she could afford to do so. We have also been exploring the idea of buying another home and renting our current one out. Having an overall view of my finances encouraged me that I would have enough to take on a second mortgage. Keeping tabs on everything gives me confidence that I’m heading in the right direction!

QA

Identity theft, fraud, and flat out stealing are all too common in our world of digital finance today. Bank robbers are gone and hackers and in. It’s a scary thought to think that someone on a computer can do more damage than an armed bank robber but that’s the world we live in. Thankfully, we’re protected against theft and fraud (I’ve had my credit card number stolen twice and thankfully wasn’t liable for any of the charges) but it’s often on us to monitor these things. Our bank doesn’t necessarily know we’re not in Denver stocking up on outdoor supplies or that we’re not in San Francisco checking into an expensive hotel (both real life stories for us). Checking things monthly (or more frequently) gives you a chance to QA (Quality Assurance) everything. Perhaps a transfer didn’t go through, or that one mutual fund you’re in isn’t performing as well as it should. Doing a holistic check once a month will allow you to take stock of everything and make sure it’s looking like it should.

Motivator

I also find myself being more and more motivated to continue building my overall net worth. It’s almost a positive reinforcement cycle; I’m pleased to see my success so far, and am motivated to keep it up! Staying positive helps me to say “no” to more of the financial decisions I shouldn’t be making, and say “yes” to more of the financial decisions that I should be making!

Tracking my net worth has been a cool experience for me, with some expected benefits (worrying-less, QA) and some unexpected benefits too (confidence, motivation). Consider trying it yourself and see if you get some of these similar benefits!