Review Your Net Worth Statement Regularly

Here are some thoughts from the book The Net Worth Workout: A Powerful Program for a Lifetime of Financial Fitness (see my rating for details) on how we all should review our net worth statements regularly. Their thoughts:

I want to encourage you to set up your Net Worth Statement so that you can monitor it quarterly and track your improvements. One reason people don't do better with their finances is that they only look at the "big picture" annually, if at all. But if you monitor your financial health quarterly, you can spot your weaknesses quickly and adjust. One of the secrets of becoming financially fit is staying on top of your situation. After all, if you only stepped on the bathroom scale once a year, how would you know if your dieting efforts were paying off?

I'm in agreement with the "check your net worth regularly" advice, and this is what I do. However, I do it monthly. It gives me a feel for what happened the past month, how I'm doing, what changes I want to make the next month and so on. Quarterly would just seem like too long to me. And besides, it's very easy to check my status as Quicken keeps a running tally of where I stand.

I take the information each month and put it into a spreadsheet I've been keeping for years. It lists net worth by month and even breaks it into "liquid" and "illiquid" portions so I can see what I can get my hands on if need be. My sheet also includes an annual summary for the past 8-10 years so I can see my progress through the years.

For more thoughts on tracking and growing your net worth, see these posts:

• How to Compute Your Net Worth and Check Your Financial Progress

• Median Net Worths -- Are You Ahead or Behind?

• Net Worth Increasing by More than Your Salary

Comments

[The Financial Ladder]

I anxiously complile our net worth on a monthly basis. I think this may be one of the reasons for our 56.5% increase in net worth over the previous year. Nice post...

[cory]

I also do mine monthly, I even think it's fun! I'm always eagerly anticipating the first of the month so I can tally up the numbers. Though it's possible I only think it's fun when it goes up. (Up 72.95% in '06)

[gen-x-finance]

I started about a year ago tracking mine.
I am surprise at my progress over the last year. Looking at my progress has been rewarding because it has lead me to refocus some of my spending to build my net worth vs. blowing extra money

A few of the blogs I follow use: http://www.networthiq.com to track theirs.

I like using it because you can remain anonymous and compare yourself to others in your demographic. I have only received one email from them, but I believe they will send you a reminder to enter your data every month.

I am surprise at my progress, but it has lead me to refocus some of my spending to build my net worth vs. blowing extra money.

[SteveK]

I track net worth every *day* in Quicken, at the bottom left of the screen!

It should be pretty close to reality...it has all my bank, credit card, investment accounts, and loans. Most of my investments are set up such that Quicken can check the daily share prices. I have asset accounts for the house's rough value and our vehicles (periodically updated via kbb.com). The only thing I don't have listed is our household "stuff", though I should probably make up a number.