LearnVest’s New Year, True You Challenge: Week 4 — Nail Down Your Net Worth

LearnVest’s New Year, True You Challenge: Week 4 — Nail Down Your Net Worth

To help get you motivated to make progress on your money in 2015, we’re offering up weekly to-dos as part of our inaugural “New Year, True You Challenge” series.

If you’ve just established your new 2015 budget, there’s probably a bunch of numbers swimming around in your head.

You know, everything from small line items — like your $70 gym membership — to bigger digits, such as that three-figure monthly debt payment.


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Every number is important, of course. But when you’re designing a financial plan for the next year, it helps to zero in on one big-picture figure, in particular: your net worth.

Simply put, it's the difference between your assets and your liabilities — or how much you own versus how much you owe. Knowing this number can be key to tracking your financial progress from one year to the next.

That’s why this week’s challenge is all about learning how to calculate your net worth — then leveraging it as motivation to hit your financial goals.

If your resulting figure is negative, don't panic. The most important thing is that you're making consistent progress toward a positive number.

Week #4 Challenge: Know — and Grow — Your Net Worth

In general, financial planners recommend calculating your net worth at least once or twice a year, as a way to check in on your financial health.

Not a numbers person? Not a problem: The math is simple.

Start by tallying up the value of everything you own: any cash in checking and savings accounts, the balance on brokerage and retirement accounts — and big-ticket assets like real estate, cars and jewelry. Then take that figure and subtract all of the money you owe, such as credit card debt, student loans and your mortgage.

Voilà! The result is your net worth.

(Hint: You can automatically view this figure in your LearnVest.com account — and even watch how it fluctuates from month to month.)

Now, if your resulting figure is negative, don’t panic. When it comes to net worth, we think one of the most important things is that you're making consistent progress toward a positive number.

To help ensure you’re heading in the right direction, it can be beneficial to set a specific goal, like putting your debt repayment plan into overdrive or funneling an extra $200 into your 401(k) each month.

Even little steps — like adding an extra $50 to your student loan payment or savings account — can help move your net worth needle one tick closer to where you ultimately want to be.

RELATED: 9 Money Habits That Can Help You Build Wealth

LearnVest Planning Services is a registered investment adviser and subsidiary of LearnVest, Inc., that provides financial plans for its clients. Information shown is for illustrative purposes only and is not intended as investment, legal or tax planning advice. Please consult a financial adviser, attorney or tax specialist for advice specific to your financial situation. LearnVest Planning Services and any third parties listed, linked to or otherwise appearing in this message are separate and unaffiliated and are not responsible for each other’s products, services or policies.


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