Net Worth — Why to Track It and How to Calculate Yours
Tracking your net worth keeps your big picture clear — so you can spend wisely, prepare for shocks, and make faster decisions. Big expenses (hospitalisation, legal fees, disasters) can dent wealth. A live net‑worth view tells you how to place your next step with confidence.
What Is Net Worth?
Net Worth = Total Assets − Total Liabilities. It answers: “How much are we financially worth today?” Track it to see trends, avoid lifestyle creep, and stay frugal without guesswork.
Why Tracking Net Worth Is Advantageous
1) Better Decisions
Know what you can afford before committing to big spends or loans; prioritise goals, not impulses.
2) Early Warnings
Spot red flags like shrinking buffers, rising EMIs/DTI, or over‑reliance on illiquid assets.
3) Motivation & Focus
Seeing progress builds good habits — you’ll save and invest more deliberately.
What to Include
| Assets | Examples | Notes |
|---|---|---|
| Cash & Deposits | Savings a/c, FDs, recurring deposits | Record balances at month‑end |
| Investments | Mutual funds, stocks, ETFs, PPF, NPS | Use latest NAV/market value |
| Retirement | EPF, gratuity, superannuation | Estimate statements quarterly |
| Real Estate | Home, plot, commercial, farm | Use conservative market value |
| Alternatives | Gold/Silver, REITs/InvITs, bonds | Mark‑to‑market where possible |
| Other | Vehicles, valuables | Use depreciated values |
| Liabilities | Examples | Notes |
|---|---|---|
| Home Loan | Outstanding principal | Use latest statement |
| Education/Auto Loans | Outstanding principal | Shorter tenure is better |
| Credit Cards/Personal Loans | Full outstanding | Pay off high‑interest first |
| Taxes/Legal | Due but unpaid | Keep buffers |
How Often to Update
- Monthly is ideal for habits; quarterly is fine if busy.
- Record the same day each period (e.g., last day of month).
- Maintain a simple log (Excel/Sheets) for trendline.
Interactive Net Worth Calculator
Assets
| Asset | Value (₹) | |
|---|---|---|
Liabilities
| Liability | Amount (₹) | |
|---|---|---|
Tip: Keep 6–12 months of expenses in safe/liquid assets. Watch your DTI (EMIs ÷ income) and keep it under 25–30%.
Red Flags to Watch
- Net worth stagnant or falling for several periods.
- Debt growing faster than assets; DTI above 40%.
- Illiquid assets dominate (hard to access in an emergency).
- No emergency fund; overuse of credit cards.
Privacy & Security
- Store your sheet locally or in a secure cloud; restrict sharing.
- Keep a separate offline copy for emergencies.
- Do not store account passwords in the sheet.
Bottom Line
Maintain a living net‑worth record. It sharpens your spending, keeps you frugal by design, and prepares you for life’s big expenses without panic.