[ad_1] The post The Only Net Worth Spreadsheet You’ll Ever Need appeared first on Millennial Money. Most people think of their value in terms of how much they have in their bank account. The term net worth simply isn’t discussed much outside of the financial world. Yet net worth is an important metric that all consumers should actively think about as they build wealth and move through life. Let’s take a look at how you can track your net worth… and why it’s important to do so. First up: What is net worth? Net worth is the difference between what you own and what you owe. This is a very personal calculation. As such, it’s nothing to stress over when approaching a lender about taking out a mortgage or an auto loan. However, it’s a good way of tracking your true financial value, especially as you age and your financial situation becomes more complex. Picture Todd, 40 years old with a house valued at $200,000, a $150,000 mortgage, $20,000 in checking, $10,000 in consumer debt, $10,000 in personal property, and $50,000 in mutual funds and ETFs socked away for retirement. Add it all up, and Todd’s net worth is $120,000. Way to go, Todd! Calculate net worth with this template There are many different ways to calculate net worth and tons of free tools floating around the internet. But not all net worth trackers are the same. If you’re interested in figuring out your net worth, head over to Millennial Money’s free net worth worksheet, plug in your figures, and see where you stand. Also be sure to check out our free net worth calculator. You just may be pleasantly surprised at what you learn. Or you may see that you have some work to do. Grab the Free Template Assets vs. liabilities When you use our net worth spreadsheet, you’ll notice that the tool is split into two categories: assets and liabilities. It’s important to note the difference between these categories. Assets Assets refer to objects you own outright (e.g., your bank account deposits, investment accounts, retirement savings, valuable items, and so on). If your asset allocation is on point, it might take a while to round up every number. Bank accounts Checking accounts Chances are you’re using checking accounts for everyday purchases. Even if you don’t have a lot in checking, you should still add each account balance to your net worth. Savings accounts Make sure to include all your savings accounts from traditional banks, online banks, and credit unions, too. LEARN MORE: Best Banks of 2021 Money market accounts You may be using money market accounts, which generate higher interest rates than regular checking accounts. Add these to your list of assets. Retirement investment accounts Retirement accounts may include traditional individual retirement accounts (IRAs), Roth IRAs, SEP IRAs, or solo 401(k)s, to name a few. These are examples of tax-friendly accounts that let you maximize long-term growth. Brokerage account(s) You should also include any personal investing you’re doing through brokerage firms like Schwab, Fidelity, and Vanguard. Cryptocurrency account(s) If some of your money is tied up in cryptocurrency, it still belongs on your list of assets. Head over to your cryptocurrency exchange, collect your total portfolio balance, and add it to your list of assets. Real estate Contact your lenders and ask for a valuation report on your personal home and any investment properties you own. The valuation report should give you an updated market value for your property. If you own your home outright and don’t have a loan, you can contact an independent appraiser to conduct an assessment for you. Vehicles Any vehicles you own–including cars, motorcycles, boats, or heavy machinery like tractors or bulldozers–count as assets. Determine their current value and add each one to the list. Need help figuring out how much each is worth? Head to Kelly Blue Book. Jewelry Take an inventory of any expensive personal accessories you have. This may include your engagement ring, family heirlooms, and watches. If the jewelry has substantial value, it counts as an asset. Don’t bother with anything worth less than $1,000 unless it has potential future value. Other valuables Include any other items of serious value. For example, this category could include farm animals, a piece of artwork, or valuable baseball card or other collectible. Liabilities Here are some common examples of liabilities to include in your net worth calculation. Mortgage When you request a valuation report on your home, calculate how much you still owe on your mortgage and add that to your liabilities. Student loans Are you still paying off student loans? Each one is a liability. Count them as such. Credit card balances Credit card debt is one of the most notorious and expensive types of liability. Add up all your credit card balances and add them to the calculation. PRO TIP: Try as hard as you can to never carry a credit card balance by paying your bill off in full each month! Car loans Car loans also count as liabilities. Figure out how much you have remaining on each one of your cars. Other debt Make sure to factor in any other type of consumer financing that you have. This may include personal loans, televisions purchased on payment plans, or sofas. Don’t leave any other debt out. Now, subtract your liabilities from your assets, and that’s your net worth. Fingers crossed it’s a positive number. Personal Capital – Track Your Net Worth for Free FREE With Personal Capital, you can track your net worth, analyze investments, and discover any hidden fees you weren’t aware of before – as well as set spending and saving goals. Get Started! Tips for increasing your net worth Calculating your net worth can be an eye-opening experience, leaving you wanting more. If you’re not happy with your net worth, here’s what you can do to increase it. Pay off your debt High-interest debt is one of the biggest destroyers of wealth. To improve
