The 2nd quarter of 2013 came to a close yesterday and one of the things we strongly suggest is for you to start tracking your net worth each quarter. Once you have the tracking spreadsheet setup, it should take you about 10 minutes each quarter to login to each account and write down your current balances, so this is not a laborious process.
We really feel this is essential because it gives you a quick snapshot of where all your assets and liabilities stand at the end of each calendar quarter and it also allows you to compare your progress to the prior quarters to see what went right or wrong over the past three months.
We’ve been tracking this quarterly for seven years now and it’s amazing to see what we’ve been able to accomplish even during a mini-depression and Laura staying home for the past five years with our daughters. Consistent saving and living below your means really does pay off!
Just like all our advice here, we suggest you take the most common-sense net worth tracking approach for your needs. We don’t usually bother to track the fair market value of our house or our cars, engagement ring, etc., even though those things of course factor into a net worth calculation.
We just record all our assets by account (checking, savings, taxable investing account, 401k, Roth IRAs, etc.) and our liabilities by account (mortgage, student loans, car loans, etc.) on one row of an excel spreadsheet. Each quarter gets its own row, so this is a fairly compact and easy to navigate file, even when dealing with a decade’s worth of data.
Then you just add your assets together to get a total and add your liabilities together to get a total and finally subtract your liabilities from your assets to get your net worth figure.
If this is your first quarter tracking then you won’t have anything to compare to, but come the end of Q3 you’ll have a net worth to compare to at Q2 and you can log the increase/decrease to see how you fared over the Q3 period.
Let us know if you need help setting up the spreadsheet and hopefully it was a good quarter for you!
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