How to Track Your Net Worth and Why It Changes Everything
Tracking net worth rather than income changes your entire financial perspective. Here is how to set up a simple tracker and what to do with the data.
Net worth is total assets minus total liabilities. It is the number that determines your actual financial progress — not your salary, not your savings balance, not your investment value. Two people with identical salaries can have net worths of £200,000 and -£20,000 after 10 years, depending entirely on their habits.
What to Include in Your Net Worth Calculation
- Assets: bank accounts, investments, pension value, property equity, crypto, business equity
- Liabilities: mortgage balance, student loans, car finance, credit cards, any other debt
- Net worth = total assets minus total liabilities
- Update monthly or quarterly — daily is too frequent and emotionally noisy
- Crypto: use Steyble portfolio view for real-time asset valuation
Why Net Worth Tracking Changes Behaviour
When you track net worth monthly, you stop focusing on income and start focusing on the spread between assets and liabilities. A pay rise that goes into lifestyle inflation shows up as flat net worth. Paying off a credit card that charged 20% APR shows up as a dramatic net worth increase. The metric aligns your attention with what actually matters.
Setting Net Worth Milestones
- First milestone: zero — no longer in net negative position
- Second: 3 months of expenses — the true emergency fund target
- Third: 1 year of expenses — provides genuine security and optionality
- Fourth: 10x annual expenses — approaching financial independence
- Fifth: 25x annual expenses — traditional FIRE number