Personal Net Worth

Personal_Net_WorthHave you enjoyed perusing monthly expense breakdowns or personal net worth details other bloggers have published? Most of us enjoy the occasional financial voyeurism. I know I certainly do. As much as I enjoy peeking behind the curtain,  it’s always left me with mixed feelings. It’s not uncommon for it to lead to someone comparing themselves without context to what is published.

Have you ever felt great about your progress, then suddenly feel like it isn’t enough after seeing another’s progress? Personal net worth and monthly expenses should be shared to provide/receive support. You should only compare yourself against YOUR previous achievement. So after much thought, I’ve decided to share personal net worth in a different context and propose an alternative.

How To Calculate Personal Net Worth

Before diving in, for anyone not familiar with net worth it means figuring out how much you own in value. At a high level, it’s calculated by

(Add up all items of positive value) – (Add up all debts) = Personal Net Worth

This can work out to be positive or negative, depending on assets and debts you have. An asset can be cash on hand, value of real estate you own (minus the amount owed to the bank), investments, value of car, etc. Income is NOT part of your net worth. If you want a general quick idea of your net worth, MoneySense has a personal net worth calculator.

What Makes Me Uncomfortable Sharing My Personal Net Worth in Numbers?

Numbers without context is an incomplete story. Even with a breakdown of monthly salary, sum of expenditures by category and savings amount doesn’t paint the whole picture. There’s so much more to the story. There are a few key challenges that distract and discourage.

Salary vs Cost of Living

Often if a salary is high, that will become the focus. It’s easy to feel like you can’t accomplish a savings rate or reach FI when you see a higher salary than yours published. The real focus should be how much money do you need to pay for expenses in relation to YOUR salary. Everyone’s cost of living will differ based on geography, priorities, hobbies, etc.

Circumstances Behind The Numbers

This is any context that sheds light on what’s behind the numbers. Say you have the same salary, but your savings rate is less. It could be something as simple as you have a child and they don’t. Or their kids are old enough they no longer need daycare. Maybe your grocery bill is higher because you value organic/locally sourced food. Or someone has a garden that reduces their grocery bill in the summer.

What’s Included In The Personal Net Worth

Similar to circumstances, you typically don’t have 100% context of what’s included in the numbers. Maybe they include everything from value of clothing, appliance, car, real estate. If they include value of tangible assets, unless you know all the details, how can you tell if their figures are accurate?

What Can Be Valuable Sharing Personal Net Worth or Monthly Expense Breakdowns?

Like anything else, there is a benefit to sharing numbers. It may just be a matter of changing how they’re shared.


Looking over and comparing individual spending categories to your own can be useful if you’re trying to figure out where you fit on the average or if you’re trying to reduce. Here’s an excellent example of an article from TreadLightlyRetireEarly on reducing their grocery bill. Or maybe you’re curious about what’s involved with a completely different lifestyle, FrugalWoods monthly homestead expenditure is a good example. It still needs context but it’s a great way to start research and have a conversation. Not only to establish what others find reasonable, but how and why.

See What Is Possible

There is something to be said about how powerful coming across a 50% savings rate or discovering that someone has become FI much earlier than traditional retirement age can be in opening up your mind to what other possibilities exist in life. Even if an aggressive savings rate or FI isn’t your goal, simply knowing that someone has challenged and succeeded in achieving a goal or life that is not status quo can be powerful

How Do I Propose Sharing Personal Net Worth?

While I shy away from sharing an itemized list of cost breakdown for net worth or monthly expenses, I think sharing overall net worth or monthly expenditures in percentages is a great option. It focuses on comparing against your own progress and getting/receiving support from your online community. For the past three years, it’s become a custom for me to sit down with a warm tea on New Years Day and update our year over year net worth tracker. Want to see some graphs?

Savings Goal This Year

Another view I like is seeing total net worth so far in percentages by year. I find it a little less intimidating than staring at progress that inches up over a decade or two. And it still gives me a view on the progress and fluctuations each year.


Wondering How To Calculate Net Worth This Way?

This isn’t all that different from sharing the breakdown in numbers. It can be accomplished in a few easy steps:

  • Create a spreadsheet with whatever rows you want to track different assets (positive value items) and liabilities (debt).
  • Each column will correspond to a year or month. Update the values at your chosen frequency.
  • To calculate the progress in percentage for the first time period:
    • (current time period net worth – 0) / peak net worth
    • Peak net worth is the highest net worth you’ve recorded. In some instances, it may currently be lower due to stock market dips.
  • For each subsequent time period:
    • (Time period net worth – previous time period net worth) / peak net worth

You’ll then have a percentage month over month or year over year showing the progress you’ve gradually made. If you’ve amassed some net worth, even if it’s modest and you don’t start tracking from when you started at 0, the first time period percentage will be a little skewed. That’s details though. If you find it skewed too much and it bothers you, smooth it out by adding extra time periods that start from 0 using your best educated guess.

Consistency Is Key

Whatever you choose to include in your net worth, consistency is key. This is needed both when and how you track.

  • In our net worth, I always track numbers as close to possible to Dec 31 values as that’s what I’ve done in the past. It may vary a little here and there, but it’s close.
  • If you include an asset in one time period, you need to continually include it until it has 0 value and stays there. For instance, if you decide to include your car, you need to track that value until you sell it for a specific sum, or it’s value is 0.
  • Be consistent with how you calculate the value of an asset. For example, real estate. I don’t consider it an investment, however we will inevitably get money if we sell it. So I track its’ value using the same calculation every time (current market value – mortgage balance – fees to sell and buy a new property).

Net Worth Will Fluctuate

Your net worth is a value at a point in time. It will fluctuate. Given enough time, you’ll likely see a negative percentage of progress in some or several time periods. Don’t panic! Aside from debt, which I won’t get into other than eliminate it asap, there are three common reasons for a drop:

  1. An unplanned expense or life event happened and you had to dip into your emergency fund. This is not a setback. Congrats you covered the expense without taking on debt, it did it’s job. Now build it back up.
  2. The stock market took a dive and your investments are now worth less on paper. This is no big deal, it happens. It doesn’t matter what it’s worth now. Unless something catastrophic and historical happens, it’ll recover.
  3. If you track assets with diminishing value (electronics, cars), it’s drop in value will affect your net worth over time. Though it may be offset by investments, savings, etc.

Fluctuation in your net worth is normal, especially if you’re tracking it month by month. What really matters is that there is an overall trajectory increases over time.

Want Another Fun Graph?

Spreadsheets and numbers are my guilty pleasure and relaxing past time. While it is by no means the majority of what takes up my time, I enjoy tracking what work our money is doing for us. I consider travel, or any other significant experience an investment. I don’t count it as part of our net worth. It would oddly skew things as it goes from investment to 0 money wise on paper. But there is an intangible value there. So I track that too as a separate experiences sunk funds investment.

So what do you think? Should net worth/monthly expenditures be shared as cold hard numbers? Do you have any stories to share about reactions to comparing yourself to published numbers?

0 Replies to “Personal Net Worth”

  1. These reasons are exactly why, while I do share my monthly spending and did a full post on our grocery expenses, you won’t see a monthly update on our net worth / sharing our monthly income (hence why I don’t share mortgage/daycare costs). The biggest use to these I think is the individual comparison from month to month. And, like you said, to see that it really is possible to make smaller expense numbers work.

    1. We have the same view! I noticed that about your numbers. I like how you share them.
      Obscuring some of those details or focusing on a few key areas eliminates some of the drawbacks. Of course I’m sure plenty will argue that removing that makes it an incomplete picture.
      Then there’s personal comfort zone and privacy….

  2. Great article with a good overview of net worth and how to calculate it. I am in the same boat, I can understand why people would want to know my net worth in order to get an idea on how the things I am saying is working (or not) for me, but I want the privacy and don’t want to share all these details online. I don’t mind sharing bits of my expenditure or my income, but not the whole story.

    1. I get the impression many feel this way. Now I’m starting to wonder, if you share aspects of your spending, maybe there’s potential for multiple articles?! Something to think about anyway.
      Thanks for reading!

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