Who wants to be a millionaire? Everybody, right? But how exactly do you get there? For starters, you need to keep track of your money to see where you stand! Your net worth is one way to measure how much money you have at any given time.

When you change your saving and spending habits, your net worth changes, too. It’s important to keep track of your net worth over time so you understand whether you’re on track to reach $1 million — or whatever your big financial goal is.

[Check out J Money’s story — he tracked his net worth over 11+ years on his journey to becoming a millionaire and he shows you exactly how he did it!]

Here, we’ll show you how to track your personal net worth.

What Is Net Worth?

Your net worth is the difference between what you own and what you owe.

Things you own are called assets. Things you owe are called liabilities.

What Is a Financial Asset?

Again, an asset is something you own. These are all examples of assets:

• The money in your bank account and savings account
• The current market value of your retirement account
• The current market value of anything in your investment accounts
• Your home (aka your primary residence), if you own it
• Your car, if you own it
• Valuable antiques, jewelry, heirlooms, etc

What Is a Liability?

Liabilities, on the other hand, are things you owe someone else — anything that takes cash away from you. Some examples:

• Your mortgage loan
• Your auto loan
• Your student loans
• Credit card debt

Together, the difference between your total assets and your total liabilities makes up your net worth.

Your number will either be positive or negative, depending on your financial situation. For example, if you have a lot of student loan debt, you’ll probably have a negative net worth until those loans are paid off. And if you have little to no debt, you’re more likely to have a positive net worth.

How Do I Calculate Net Worth?

To figure out your current net worth, you need to gather up all the information about your current assets and current liabilities. From there, you’ll have a starting figure to begin tracking your net worth for the years to come! (Remember, net worth changes over time, so this is a calculation you’ll have to do often if you want an up-to-date picture of your total net worth.)

There are a few different ways to calculate your wealth. For one, you can bust out some paper and a pencil and make lists of your assets and liabilities. When you’re done, subtract your total liabilities from your total assets to arrive at your final number — the total amount is your net worth.

Although it’s easy enough for a one-time calculation, the paper-and-pencil method isn’t the most sustainable way to track your net worth over time. An alternative to writing it out is to create a net worth statement using an Excel spreadsheet, which will do all the math for you and neatly organize your numbers into rows and columns. The spreadsheet method also sets you up for tracking your net worth in the future — more on that in a minute.

[Here’s the exact Excel template J Money uses — download it and start your own net worth tracking:  J’s Financial Snapshot]

How to Use Personal Capital and Mint to Calculate Net Worth

If you’re not really into spreadsheets or math, several apps and tools will do the net worth calculation for you. 

Two of the most popular options are Personal Capital and Mint.

Personal Capital is a free app that does many things, including calculating net worth through a tool called the Net Worth Calculator. The app allows you to connect to your financial accounts, which provides the numbers needed to do the calculation. 

Personal Capital will let you compare your net worth with the average net worth in your tax bracket or age group, which is great if you want to see where you stand.

[See our review of Personal Capital]

Another free app is Mint, which calculates net worth and contextualizes it with other factors like your credit score and budget. If you allow Mint to link up to your financial accounts, it determines your net worth and tracks its changes in a section of the app.

Mint’s “all in one place” model lays out all your assets and liabilities, allowing you to clearly view what’s helping you — and what’s holding you back — in your personal finance journey. 

Both apps tap into your financial information to calculate your net worth, but remember that this number is bound to change over time, so you’ll have to check the apps frequently to see your changes over time. No matter where your starting point is, tracking your net worth lets you understand these changes.

Why Should I Bother Tracking It?

So, now you know your net worth. Having your number is a huge step in the right direction! Now it’s time to track it, like J Money did.

Why would anyone bother tracking his net worth over 11 years? Easy: It shows your progress as you work to increase your assets and decrease your liabilities. Financial independence takes time and is a work-in-progress journey … monitoring your numbers shows your commitment to the journey.

It also exposes the strengths and weaknesses of your personal finance habits. You can see if your too-big car loan is holding you back from boosting your Roth IRA or retirement savings, for example. And you can see how making specific changes to your assets and liabilities affects your financial health.

How to Track Net Worth

Tracking your net worth might seem daunting, especially if you’re not a numbers person or don’t have much experience in personal finance.

But there’s no need to be afraid — because tracking your net worth is easier than ever thanks to all the finance apps out there.

There’s an overlap with apps that calculate your net worth and the ones that track it; most apps do both and integrate your bank accounts, investments, loan information and more to create a comprehensive look at your financial situation.

The best apps for both tracking and calculating net worth are Personal Capital and Mint.

Personal Capital has a dashboard of information that displays net worth tracking along with several other features, complete with visuals that clearly outline your finances and compare them with your peers’. Seeing all this information in one place is excellent for measuring your progress and putting it into context.

The portfolio tracker tool within the app is another way to evaluate your personal finance journey. Since the assets portion of net worth includes investments like stocks and mutual funds, this tool enables you to view all your investments over time and make informed choices based on these trends. The better your investments do, the more assets you acquire; this progress can potentially improve net worth.

Mint prides itself on including all your information in one place, and net worth tracking is just one of the services it provides. Its budget trackers also make seeing your day-to-day spending very clear. Because spending and savings both play a part in your net worth, understanding your regular spending habits can give you insight into what you can adjust to improve your overall wealth.

Mint also has a tracking tool for bill payments. With credit card debt plaguing so many people, keeping track of (and paying!) your credit card bills is one way to reduce your liabilities and to visualize the changes you may need to make to improve your financial situation.

The Bottom Line

Knowing your net worth is key to understanding your financial health and making smarter financial choices in the future. With so many apps and tools on the market, there’s a net worth calculator and tracker for everyone.

It might be hard to get started, but it’s absolutely worth it to get clarity about what’s building up your finances and what’s bringing them down.

What are you waiting for? Go get started. Here’s to your wealth!