In the world today we hear a lot about our bottom line, as long as it is going up we are told we are okay. Bottom line and net worth can be used interchangeably but a lot of people don’t actually know what it is.

What is your net worth?

Your net worth is the total of all of your assets (what you own) less the total of all your liabilities (what you owe). The end result is what you are worth (bottom line/ net worth)

Assets – Liabilities = Net Worth

So now that we’ve determined how to calculate your net worth why on earth would tracking it be important. For me it is a way to see my progress over the course of my financial journey. I believe in setting financial goals and I think that a measurable aspect of a goal is extremely important. Sure I set some pretty lofty goals sometimes, but I also set yearly net worth goals, like increase our family net worth by $20,000 this year! Screen Shot 2014-08-05 at 10.20.33 PM This is our progress so far, and I’ve been tracking our family net worth since January of 2012. We still have a ways to go this year, but I’m confident that the stock market will be on our side and we will get there.

I’ve finally taken the time to update our net worth page this year so you can follow our progress over there! 

Download the My Pennies, My Thoughts net worth tracking spreadsheet for Excel HERE

Download the My Pennies, My Thoughts net worth tracking spreadsheet for Numbers HERE

Step 1: Define Your Assets You will find a tab labeled “August 2014” where you will have to list out all of your asset. Only change the cells that are coloured green, the rest will calculate automatically. Screen Shot 2014-08-08 at 9.45.51 AM Step 2: Know what you owe!  This is where you want to list out everything you owe from student loans to credit card balances, and so forth. MAKE SURE YOU PUT IN A NEGATIVE VALUE FOR YOUR LIABILITIES. Again only fill out the cells that have been coloured red.  Screen Shot 2014-08-08 at 9.46.01 AM Step 3: Your Bottom Line  This will calculate automatically, and you can find this value located just below your assets. Screen Shot 2014-08-08 at 9.46.08 AM Step 4: Setting a net worth goal. If you click on the other tab in the spreadsheet you will notice a cell coloured pink where you can insert your net worth goal Screen Shot 2014-08-08 at 9.46.21 AM Step 5: Continuously Tracking Your Net Worth. This is by far the most important step. You need to do this so that you can see the progress you’ve made. Again only change the cells that are coloured pink, but ensure you are putting numbers in this spreadsheet each month and the rest, including the pretty graphs below” will calculate automatically. If you don’t want to start at 2012 because you have absolutely no clue where your finances were at that point than by all means change the first date to August 2014… we all have to start somewhere! Screen Shot 2014-08-08 at 9.46.27 AM One of the first graphs that will populate is your current year net worth. You can see how much progress you have made over the current year! This is my personal graph and as you can see it has quite a dip in June which was largely due to not working and paying for Europe! Screen Shot 2014-08-05 at 10.21.12 PM The next graph I’ve created is a year over year comparison. Again this is my person graph and I’ve been tracking my net worth since 2011 (wow has it been that long), so you can see my progress! Looking back it feels so good to see how far I have come!Screen Shot 2014-08-05 at 10.21.32 PM   The last graph that will appear is a net worth over the time you have been tracking it. It’s easy to get upset in a month if your net worth takes a hit but realize that over the long run the trend will be up! Screen Shot 2014-08-05 at 10.21.45 PM I hope you enjoyed this resource, and I hope it helps you grow your wealth!