Who else saw the Instagram story template, The Decade in Gifs, and jumped on board?
Guilty. (See below)
It was so much fun thinking through the past 10 years and choosing a single image to encapsulate an entire 12 months. I had a lot of fun with it and I hope those of you who did it as well had a fun time traveling back in time.
Wouldn’t it be nice if you could look back in 10 years and see how much you progressed, year by year, from a personal finance perspective? Instead of picking one image to summarize the year, you could proudly post a figure that represents your net worth. Now I think that it would be super cool, any other finance or number nerds out there with me?
I get this is super personal, and by no means am I suggesting sharing these numbers with the world on Instagram or the big social media channel in 2030. What I am encouraging you to do is make a resolution to yourself to make a conscious effort and begin tracking your financial progress this year.
If this is something that speaks to you, the time to start this journey of tracking your net worth begins today! Sharing with you all a few tools that can help you track your investable assets, liabilities, net worth, credit score, you name it these tools can help you track it!
Budgeting & Net Worth
For apps that specialize in helping you stay on track with your spending ( which can translates into increased savings!) and account aggregation the following tools are my favorite.
This is not the first time I have raved about this incredible tool. The first time I mentioned it was in my post on creating budgets. This app truly does it all from tracking spending, setting up monthly budgets, tracking credit scores, account aggregation and net worth tracking. When working with my clients, this is my go to recommendation to get started in understanding their financial picture. It’s a free online tool that is easy to set-up and get started. The one caveat is that it takes time for the website to pick up on user’s habits when categorizing expenses. For example, you may need to adjust the Amazon Go charge from shopping to groceries a handful of time before the program remember that you go to Amazon Go for food and work snacks (anyone else?).
Quicken was my first deep dive into personal finance and tracking my spending and net worth. As a college graduation present, my father gifted me the newest version of Quicken and I was hooked. Think of Quicken as a more robust version of Mint.com with greater capabilities in tracking spending and analyzing the growth of investable assets.
While I loved Quicken, it was challenging to maintenance each year. The product was not free which meant I would have to purchase the latest version, re-download and merge my data at least once a year. Last I used Quicken, it was not cloud based which meant it required constant backing up which took time and storage space on my computer. Not the worst thing in the world but required more maintenance and attention than I was willing to give at the time.
I personally don’t use Personal Capital but from what I understand, it is very similar to Mint.com but has a greater focus on investments and offers investment tools to the end user than Mint.com.
Tips for Success
This is not some small New Year’s resolution. To make this work and be able to look back 10 years from now and track financial growth will take change in order to create new habits.
Set Up Goals
It’s hard to get motivated for anything in life without a goal. The same rings true for building your net worth, what’s the point if you don’t have a bigger goal in mind? Remember to dream big because you are the creator of your life and success.
Where do you hope to be in 10 years? Is it retirement, buying a second home, being debt free? Whatever the goal, nothing is too small. What’s important is to put it on paper and take it through the SMART goals process.
One proven way to create wealth over time is through investments. As I shared in this post, the time value of money is powerful and when invested in an environment with an expected positive return, you stand to see the value of your account double if you take the expected rate of return and . When you do the math, the numbers are powerful and can help to increase your net worth year over year.
For those of you looking to start investing in 2020, I would first tell you to read this blog post I wrote earlier this year to determine if you’ve earned the “right” to invest.
Set up reminders in your phone to update or check in on your progress once or twice per month. This is not to say to look at your net worth each day, but to be mindful and keep tabs to understand directionally where things are going. An easy way to remember to revisit your personal finance tools is to have it coincide with your paychecks. Don’t let this intention fall off somewhere mid-February.
If you think you’ll struggle with the consistency of tracking your spending and savings in pursuit of building a bigger net worth, the best thing to do is find an accountability partner. This can be a family member, friend or financial professional to help you accomplish this 10 year tracking challenge.
Life is not perfect and you may need to make adjustments along the way as life happens. Remember to give yourself grace as you work your way to achieving your net worth goals.
So are you up for the challenge!? Who else is joining me in tracking their net worth this next decade? Sharing a few templates below to memorialize your progress along the way!