Why You Should Calculate Your Net Worth And Check It Regularly

Why You Should Calculate Your Net Worth and Check It Regularly

Your net worth is a yardstick for your financial progress, and it's more important than your income. The Simple Dollar explains how you can use this number to track and improve your finances.

Photo by 401(K) 2013

Your net worth is simply your assets (such as savings and investments) minus your liabilities (debts), but a better calculation uses "usable" assets -- that is, don't include your home or car market value unless you intend to sell now.

Once you've found this number, there are a many things you can learn from it, including deciding whether any move you make is a poor financial move (for example, loaning money to people who won't repay you decreases your net worth); whether you're truly progressing financially; and whether extra time you're working is really paying off.

Check out the article below for some additio9nal calculations you should consider to track your progress.

The Most Important Number [The Simple Dollar]


Comments

    Your income is much more important than net worth when you are near retirement or in retirement.
    Your income is also much more important if you are out of a job.

    Net worth is an instant measurement and it very likely to be varied to a great degree by your assets (apart from cash in the bank)
    Remember some assets like a home are at a market price but you still need a place to live in

    Is anybody else deeply disappointed that the stock image calculator isn't showing '58008'?

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