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How Tracking Our Net Worth Motivated Us to Achieve Financial Freedom

In the beginning of our marriage around 10 years ago, I loved watching the “Suze Orman Show.” 

She had a fun and quirky way of getting people to focus on their finances

Suze would talk to people about their debt situation and why they needed a will. She would even break the news to them when they couldn’t afford to buy something (even though they really wanted it). 

There was one specific segment on the show I really enjoyed. It was called “How Am I Doin’?”. 

Suze would analyze someone’s financial situation and give them a letter grade (from A-F) based on the information they shared with her. 

On this one particular evening, I was watching the show with my wife. Suze kept saying this term “net worth” over and over again. I didn’t really understand what “net worth” meant, but I figured since we were making around $130,000 combined that our net worth would be huge. Surely our letter grade from Suze would be an “A”.

When We Learned We Weren’t Rich

My wife and I decided to find out our net worth by writing it on our big white board in our guest room.

>>Read More: How to Calculate Your Net Worth

We wrote down our “assets” — all the stuff we owned — on one side of the board. 

At the time, they were as follows:

  • Home:  $140,000
  • Roth IRA #1:  $8,000
  • 401k #1:  $8,000
  • Cash:  $2,000
  • Car:  $18,000

TOTAL ASSETS:  $176,000

The assets column was pretty impressive! A home, retirement accounts kickstarted, a car, and a little walking around money. 

Not bad. 

Then we jumped to the “liabilities” — the stuff we owed — and wrote them next to our assets in a separate column. Here’s what they looked like at the time:

  • Mortgage:  $177,000
  • Student Loans:  $28,000
  • Car Loan:  $21,000

TOTAL LIABILITIES:  $226,000

This number ended up being a lot higher than we were expecting. I knew that my house was “under water” due to the Great Recession, but it didn’t really sink in until I physically saw that I owed more on the home than it was worth.

And the student loans and the car loan felt like debt that a lot of people carry. Those liabilities felt “normal” to me.

But when I took my assets, subtracted my liabilities and saw a -$50,000 net worth on that big white board, “normal” didn’t look so cool to me.

We weren’t rich. We had a negative net worth and Suze would not be throwing an “A” grade our way anytime soon.

Unless we made some changes.

10 Years of Improvement Starts Now

After getting over that momentary financial depression, I realized this wasn’t something to be sad about. This was an opportunity to change the course of our lives and the lives of our future children. 

From that moment forward, I vowed to improve our negative net worth situation and make steps in the right direction. After all, we were making great money together as a couple and that six-figure combined income could be a huge shovel to dig us out of this mess.

Here are some of the steps we took to increase our net worth.

Track Your Net Worth Consistently

Our first year was our most important year. This was because we made some important decisions that changed the trajectory of our net worth for good.

The easiest and most motivating decision was to simply commit to tracking our net worth going forward. By seeing our assets and liabilities clearly, we were able to be motivated by them.

One of Personal Capital’s free tools that I use is their Net Worth Tracker. This tool gives you clarity with your money and breaks down where you stand with your assets and liabilities in real time. Since it’s connected to your financial accounts, there’s no need to manually update your net worth like I used to when we started out. I wish I knew about that free tool when I started tracking my net worth!

Get Started

For a quick look into your net worth, plug your numbers into the following calculator.

Commit to Living on Less Than You Make

Although the concept is simple, living on less than you make is much harder than it looks. Nevertheless, this commitment gave us a freedom that we lived with for the rest of marriage. 

For periods of time in our journey, we would save up to half our income and use it to pay down our debts and save for retirement. 

This super-saving strategy helped us to make some major financial strides together.

>>Read More: How to Master a Household Budget

Invest with the Future in Mind

It can be difficult to invest your money in the stock market when your balances start off small. That can feel like just a drop in the bucket!

To get ourselves motivated to invest, we would first think about what we’re investing for. Saving and investing is boring if there’s no purpose to it.

When we put the focus on our investment goals, it became a lot easier to part with the money for the time being. Some of those goals included:

With detailed goals and a little help from automation, our net worth started to soar. 

Increase Your Income

Growing your net worth is a whole lot easier when you’re making more money. 

The bulk of my working career was spent in a sales and account management capacity. When I would sell more, I would make more. Since I was tracking my net worth consistently, I was highly motivated to sell!

During our first 10 years of marriage, we averaged around $190,000 together as a couple. With saving and investing a bulk of our income, we started to leap forward financially.

>>Read More: How to Negotiate Your Salary and Career Advancement

Celebrate the Big Moments Together

Looking back, we’ve hit some big milestones as a couple:

Each time we hit these milestones, we celebrate together and take time to enjoy the fruits of our labor. We’ve gone on celebratory vacations, dined out, and even created some memorable traditions with our kids like our “mortgage piñata.”

These were defining moments in the first 10 years of our marriage, and it all started by simply tracking our net worth. Seeing the reality of our numbers was truly eye-opening and motivating. 

I can’t wait to see where we go as a couple over the next 10 years.

Start Tracking Your Net Worth

Personal Capital compensates Andy Hill for providing the content contained in this blog post. Featured individual is not a client of PCAC and does not make any endorsements or recommendations about securities offerings or investment strategy. The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Andy Hill is a husband and father of two kids. His personal finance goal? To give his family the best life possible and strengthen their family tree for generations to come. In 2016, he launched Marriage, Kids, & Money, a blog and podcast about young family finance. In 2020, he and his wife achieved a personal goal of becoming millionaires in less than 10 years. Now, they thrive on helping others do the same.
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