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If you’re not tracking your net worth as a couple, you should start right away. It is one of the easiest tools to help you build long-term wealth and put you on a path to financial stability.

When you were single, you may have calculated your net worth or at least have a sense of your assets vs. liabilities. Now that you are married and part of a couple, tracking your net worth becomes more important in seeing your larger financial picture.

Key Takeaways:

  • Net worth is calculated as personal assets minus your personal liabilities
  • Married couples can increase their net worth by tracking their finances together
  • Track your net worth with a spreadsheet or Personal Capital
  • To increase your net worth, decrease your debt, increase your income, and save more money

Download Net Worth Tracker Spreadsheet

What is Net Worth?

Net Worth is a calculation that shows how much you are worth. Think of it as if you needed to liquidate everything you own and come up with a final value on what you are worth.

To calculate your net worth, use the equation:

Net Worth = Personal Assets – Personal Liabilities

In this equation,

  • Assets are anything that has value and can be sold or exchanged for money. Assets can be things like cash, your investment portfolio, retirement accounts, house, and car.
  • Liabilities are the balance of loans and debt that you still owe to someone. This can be student loans, mortgages, car loans, credit card debt, and any personal loans you may have.

For example, you would add up everything that has value that you own. Say your home has a market value of $200,000, you have $100,000 in retirement accounts, and $50,000 in other savings. Your total assets would be $350,000.

From that number, you need to subtract your liabilities to determine your true net worth. Say you owe $100,000 on your mortgage and have $15,000 in student loans left. This puts your total liabilities at $115,000.

Your net worth would then be $350,000 in Assets – $115,000 in Liabilities to equal $235,000.

Why Should Couples Track Net Worth?

For couples looking to build wealth, tracking your net worth is an important first step. No, it won’t magically make you more money but it does provide essential data to understand your finances.

As an engineer, I am very aware of the concept that you can’t improve it if you don’t measure it. This just means that you need to have concrete data in order to make adjustments to meet your goal.

Let’s say you and your partner want to become millionaires. That’s a great goal, but how do you actually get there? Having a current net worth of $100,000 will have a much different path than if you currently have $600,000. Without knowing where your net worth stands, you won’t be able to reach your goals effectively.

Tracking your net worth gives you additional insight besides just how much money you have. It shows how much you are savings, how well your investments are performing, and how quickly you are paying off your debt. Use that information to make adjustments to reach your goals faster.

As a married couple, it is even more important to track your net worth. You now have double the bank accounts, double the spending, and double the financial decisions. If you don’t have a central system for tracking your progress, you can easily overlook details that can seriously hurt your financial stability.

How to Track Net Worth

If you’re not doing so already, you’ll want to start tracking your net worth on a monthly basis. This is pretty easy to do by using a simple spreadsheet or you can use a more automated tool. Here are a few options for tracking your net worth.

Use a Net Worth Tracking Spreadsheet

The easiest way to get started is to use a spreadsheet to track your net worth. Every month, you will need to login to all of your financial accounts and record their balances in your spreadsheet as an asset. Don’t forget to include your retirement accounts, savings accounts, CDs, investments, and the value of your home, if you own it.

You will also need to include any loans that need to be repaid to the lender. Include your mortgage, car loans, and any other debt that is outstanding. Use the spreadsheet functions to automatically calculate your net worth by subtracting the sum of your liabilities from the sum of your assets.

You can download our free net worth tracker spreadsheet when you subscribe to our newsletter.

Automate Your Net Worth Tracking

An even easier option is to sign up for a service that automatically tracks your net worth based on all of your financial accounts. Personal Capital is a free tool that tracks net worth in real time based on your linked bank accounts. I linked all of my savings accounts, investments, and retirement accounts. It also has an option to add your home value so that it can be factored into your overall net worth.

I also love the fact that Personal Capital can link your credit cards. This gives you the full picture of what you are spending money on and is a powerful way to manage your budget.

Combining Finances as a Married Couple

Calculating your net worth as a married couple is similar to if you were doing it for just yourself. The difference is that you will now have more accounts that you will need to track and there could be pieces that are forgotten between the two of you. You’ll need to track all of your accounts, not just the joint accounts that you both have access to.

Especially when you are newlyweds, spend some time talking about your finances. Get comfortable with asking questions about income and expenses. Understand how much debt your partner has, what interest rate they are, and if there is any fine print associated with their loans.

Use that knowledge to create a master spreadsheet that tracks the combined assets and liabilities as a couple. From there, you will be able to come up with a plan to increase your net worth together.

How to Increase Your Net Worth

If you look at the equation for calculating your net worth, there are only two variables that play into it. This makes it easy, in theory, to see how to increase your net worth.

The first is to increase your assets. This means saving more money, investing, and buying assets that will appreciate in value over time. This will generally happen over time if you have a steady source of income and are saving regularly.

The second option is to decrease your liabilities. This means paying off your loans and reducing your mortgage balance. Even with the same amount of assets in the bank, your net worth will go up if you can reduce your debt.

Here are a few ways to increase your net worth faster.

Set Realistic Goals

After you have determined your current net worth, take a few months to track and trend it. Does it remain relatively consistent each month, or even go down at times? How quickly does it increase with your current habits?

This will help to give you a baseline of how well you are currently savings, investing, and building wealth. From there, you can then set goals that you want to reach within a certain timeframe. Be realistic with these goals so that they are reasonably attainable.

Instead of saying that you would like to become a millionaire, set short-term goals that you can reach in the next year. It’s prett unlikely that you’ll have a net worth of a million dollars if you’re starting at $50,000 in that first year. Instead, break it down and say that you will reach a million in 10 years, meaning you need to increase it by $100,000 each year.

From there, look at your spending habits, lifestyle creep, and ability to save to see if that is truly a realistic goal for you and your partner.

Follow the Data to Increase Net Worth

As you analyze your net worth every month, it should give you some insights into where you can improve. Start with your liabilities and see where you can reduce them. By simply focusing on your highest interest rate loans, you’ll be able to cut your debt faster.

Look at your rate of savings to see if it is enough. Perhaps you are over-spending on expenses and not saving enough every month. By identifying that, you can take steps to cut back on your spending and increase your savings.

Another place to analyze are your investments. You’ll want to monitor their performance over multiple years to make sure they are actually contirbuting to your net worth. There could be poor investments that lose value, so think about cutting your losses if you don’t see them increasing over the long-term.

Buy a Home Instead of Renting

Millionaires actually tend to have up to 50% of their net worth in their personal home equity. Real estate can be a stable way to increase your net worth because home and land value generally goes up over the long run. By buying your own home and paying off the mortgage, you are actually reinvesting into your net worth.

If you rent a house or apartment, 100% of your monthly rent goes to the landlord. That money is actually helping to build the landlords net worth, not yours. Buying your own home does come with other expenses like taxes, insurance, and upkeep, but your mortgage payment counts towards your overall net worth.

In our case, we are paying off our mortgage as quickly as possible. This help to build our equity and net worth while eventually allowing us to be financially free. With no mortgage and no debt, we will be able to do much more with our money.

Pay Off Your High-Interest Loans First

If you have loans with high interest rates, they are killing your net worth. Credit card debt, student loans, and personal loans over 8 or 9% cost you a ton of money and make it even harder to pay off. Not only is your debt affecting your total net worth, but any money you pay towards those loans only makes a minimal impact.

The best way to increase your net worth fast is to pay off your debt. Focus on paying off the loans with the highest interest first so that your payments have the greatest effect. Try to round up your monthly payments and pay more towards the principal than what is due. If you get a windfall of money, like a tax refund, put it towards your debt to pay it off faster.

Create More Income Streams

Building wealth really all boils down to having more income than expenses and to make smart decisions with the money you save. Try increasing your income by adding more income streams so that you are not reliant on just one job. Start a side hustle in your free time to earn some extra money without quitting your full-time job. This can be as simple as dog walking, mowing lawns, or building websites.

In addition to active side hustles, look to create some passive income sources. Passive income is when you make money without trading your time every time you want to get paid. Collecting real estate rental payments is a classic example, but you could also collect royalties on songs, write a book, or invest in dividend stocks.

Cut Out Unnecessary Expenses

The flip side of making more money is to save more money in order to build wealth. As you are tracking your monthly net worth, drill down into the details to see what you are spending money on. A good way to do this is to create and maintain a budget for the family.

Take a hard look at all of your expenses and see if you really need everything. Do you really need three video streaming services, or one two be ok? What about those extra shopping trips that end in extra clothes you probably don’t really need?

Try the two week rule before buying anything that is not a basic necessity. When you get the urge to buy something new, wait two weeks and then see if it is still something you want. You’ll probably find that you can cut out a lot of impulse buys this way.

Save for Retirement Together

As a couple, you should be looking forward a long and happy life together. That includes retiring and enjoying your golden years doing what you love. To do this, though, it takes planning and saving to be able to financially afford everything you want.

Saving for retirement early in your married life is essential to set you up for success later. If you are both working, both of you should contribute to a retirement account, such as a 401(k) or IRA. If only one of you has a job, that means you will need to save even more for your retirement.

Take advantage of the tax advantages associated with retirement accounts. Pre-tax contributions and tax-deferred retirement plans both can help to save money at different stages in your life. Work as a couple to save enough money to retire happily together and do what you love.

Parting Words

Building net worth becomes easier when you have a partner to share it with. Not only can you combine your income, but you can consolidate and reduce expenses.

By working together as a couple, building your wealth becomes more fun. You can bounce financial strategy ideas off each other and hold each other accountable. The best part is that you can both enjoy your wealth by doing activities together that you love.

Related: Marketing Manager Built a Net Worth of $242,000 in 8 Years

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