What milepost are you at in your financial journey?
a clear-eyed understanding of your current financial resources
When you are on a hike, and the milepost says 1 mile, you could be discouraged or triumphant at the information. Are you an experienced hiker, or is this a significant milestone for you? How much elevation did you cover? How long is the hike? Are you even on the right trail?? The milepost is a piece of information that makes sense only in the context of your journey.
Net worth is the same. Knowing how much you owe, own, and how it’s distributed is a milepost of your financial journey. It’s not about how big your pile of money is (boring). It’s not about all the debts you owe (stressful). It is a snapshot in time of where you are financially. It’s critical information you can use to build your financial plan (hopeful). After all, once you know what milepost you are at and what trail you are on, only then can you chart your course to that view.
Net worth is the total of how much you own minus how much you owe.
Own - owe = net worth
It might be negative. Maybe you took out student loans or are just starting your career. Perhaps you’ve had more expenses than income. It is what it is. It might look like a lot of money. Maybe you don’t know if it’s a lot of money!
It might be simple to calculate. Maybe it’s just you, and you only have two accounts. It might be tedious to find your passwords, do all the two-factor authentication, and add up your different accounts - especially between two partners!
It might not be easy to look at what you owe or make yourself sit down and do it, but it’s worth collecting all the information and laying it out. That way, you can see where everything is and what makes up your net worth, which means a clear-eyed understanding of your financial resources. Is your main asset your house? Your retirement account? How much cash do you have on hand?
Assets (the things you own) might include cash in your piggy bank or a bank account. They might include investments in a brokerage account or retirement accounts. It might include your home or other property.
Your liabilities (the things you owe) might include credit cards, student loans, and/or a mortgage.

You could include the value of your car in your property. I typically don’t do this because I plan to drive my car until the bottom rusts out or it’s more expensive to repair than replace. However, if you plan to sell your car or trade it in, you might want to add a (conservative) sales price or trade-in value.
Want to do it for yourself?
If you already keep track of your net worth…
Take a look at your net worth. Does it include all your accounts? Are they up-to-date? Is your method of tracking working for you? If you’ve been doing this over time, look at the trend. Take a moment to reflect on what these numbers mean to you. What questions do you have?
Check your cash flow tracking (if you started it last week).
If you have 5 minutes…
Find the information about your total savings and the total in your investment (for most people, this would be retirement) accounts. Take a moment to reflect on what these numbers mean to you. What questions do you have?
If you have an hour…
Write out a detailed balance sheet (feel free to copy the one I made pictured above) or connect your accounts to an online service (such as YNAB, Monarch, or Empower) that will create one for you and track your net worth over time! Take a moment to reflect on what these numbers mean to you. What questions do you have?
Check your cash flow tracking (if you started it last week).