One of the best things you can do for your financial well being is to know your net worth.
I know it's so easy to bury our heads in the sand when it comes to our finances. We don't want to face reality. We don't want to think about how long we are going to be making payments on our student loans and we really don't want to find out if our net worth is negative. Like how discouraging is that?! "I'll just wait till I'm making more money to calculate and keep track of my net worth."
The thing is though, knowing your net worth now (even if it is negative) can be so empowering. Knowing exactly where you stand with your personal finances can motivate you to take action and do something about it.
Why does net worth even matter? Who cares? Like I know I'm in debt, I don't need to see it on paper #MyNetWorthDoesNotDetermineMySelfWorth. Give me a break. Net worth matters for a few different reasons, so let's dive into them:
Know Where You Stand
As I mentioned before, knowing where you stand can be the exact kick in the butt you need to start stepping up your money game. Seeing that you may be in the negative or a little behind where you thought you'd be should be motivating. You'll want to start working harder to your goals and creating a plan around those goals.
What You Track, Increases
It's the basic law of attraction. What you track and focus on, increases. This is NOT woo-woo stuff. This is real life. Have you ever noticed how you can think about something you want earlier in the day and then GET THAT EXACT THING? It's not a coincidence...but thats a story for another day. Just for now, know that by focusing on something, it's going to expand and grow and increase.
Become More Mindful
Along with the last point, by focusing on your net worth, when you are about to buy something or make any sort of money decision, you'll notice yourself pausing longer and thinking about how this will affect your bottom line (your net worth). With this one tiny mindset shift, your net worth will be positively impacted.
Start Acting Like a Wealthy Person
Pretty much every rich and wealthy person tracks and knows their net worth. Take celebrities and pro-athletes for example. We don't really talk about how much they make per hour or per game. We usually look up how much they're worth. So tracking your net worth is one of the easiest things you can do to start emanating and working towards becoming wealthy!
Look, I didn't always track my net worth either. Let's be real, it's not a very normal thing for most 23-year-olds to do. BUT since I started tracking mine in August 2018, I have increased my net worth by $15,000! Would I have made that much of an impact on it if I hadn't been tracking it? I can't say for sure but I do know that seeing I've increased by $15k is powerful and makes me want to work even harder to gain even more by this time next year.
Want to figure out your net worth but don't know where to start? I created a super easy to use excel spreadsheet where you can keep track of your net worth - click here!