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If you've been following this blog for some time, you've noticed that I have done monthly net worth reviews.
It's one of the most popular series on this site and I understand why. It's kind of fun to see how others are progressing with their finances.
We're big believers on having monthly money dates and going over your net worth as a couple.
Today I wanted to share some reason why we do this and along with a couple of reasons why we don't stress over it obsessively.
Why We Do Net Worth Reviews
The purpose of the net worth reviews is to give us a regular check-in to look at our accounts, see what’s changed, and analyze what went well and what we need to work on.
As a married couple with two kids, we usually have a lot going on and it can be easy to let some things slide (even important things like finances).
Having it on the schedule has made things much less stressful and we're more productive.
- Net worth reviews give us an opportunity to talk. We have spoken about money before doing these net worth reviews, but having these reviews on a monthly basis has become a part of our schedule.
- Comparing our budget to actual spending is valuable. These reviews allow us to see if what we planned is reasonable, need to tweak, or if we completely missed the mark.
- We get to see our progress (or lack of) on our financial goals for the year.
It'stool for checking up on our annual and handy long termgoals.
While we no longer share our monthly numbers on the site, we still track them.
If you're looking for an easy way to keep on top of your accounts, here are three options we love:
- Personal Capital: Fantastic tool if you have plenty of accounts, including investments, between the two fo you.
- Tiller: Great app for couples who want to have a completely customized budget.
- Mint: One of the first apps we used for our finances. It was a cinch to get all of our accounts imported.
We're big believers of going with what works for you and your goals, so try them out and see which one clicks best.
Why Net Worth Reviews Aren't Everything
That said, I've seen people go the opposite route and obsess over the numbers.
While we've been disappointed and thrilled by certain months, we also realize that net worth reviews aren't end all when it comes to financial reviews.
Here are a few reasons why:
They don't tell the whole picture.
Net worth reviews are a great tool at getting a snapshot of your finances. However, they are only a snapshot.
There's always more behind the numbers you need to consider.
Someone can have some pretty good numbers, but their jobs are not steady (perhaps layoffs are looming).
A family may spend $350/month on groceries, but they may either be getting $500 worth of food (by preparing their own and finding deals) or they're getting $200 worth of food (by paying more to eat out).
If you look at our past reviews, our net worth has dropped and risen
As many of us have seen with investments, stocks can be volatile in the short run, but over time it grows.
So while we still do net worth reviews, we're really focused on the long term trend rather than the month to month numbers themselves.
Thoughts on Net Worth
I'd like to hear from you. What about your family? Do you occasionally review your net worth?
How do you calculate it? Do you find knowing your net worth important or not?
This post was originally published May 2012. It has been updated December 2018.
This post may contain affiliate links. Please read my full disclosure for more info.