What Makes Up Our Net Worth?

I’ve been posting information on our net worth for more than a few months now, but I haven’t ever gone through what I include in it, and what I don’t – and where I get those numbers from. You’ll also see why I rarely include this information in detail, because we have a lot of accounts…

Stack of money for net worth

Photo credit: AMagill

This “month’s” net worth is: $474,731 (measured on July 8). I pick the 7th or 8th of the month for my statement, because by then, almost all of the payments for debt and bills have been sent out and credited to the appropriate debt account, and debited from our checking and there’s not much change in the accounts other than incoming paychecks.

Our liabilities are pretty well defined: I do not include our “working” credit cards though – the ones that we pay off every month. I take those into account when the payment leaves our checking (tends to fudge our net worth on the high side – probably $1,000-$1,500 every month).

Mortgage (the big one) $422,543.44
Car Loan $22,500.00
Student Loans $13,203.96
Chase CC $5,808.44
Total $464,055.84

It’s our assets that are a little more fluid. I include our house (because it’s value offsets our mortgage) as Zillow sees it, and our cars’ trade-in values on KBB. I only update the car values every 3 months or so – we don’t really intend on selling them anytime soon, but they are part of our value. I also include our (multiple) investment accounts and our 529 plan. Finally, I include our checking and savings accounts. Our primary checking account tends to have a pretty high balance because we operate on the YNAB methodology of living on last month’s income (Rule 4), which gives us one month of expenses while we re-work our budget and figure out what we’re going to do.

When I do the Net Worth calculations, I just let Mint tell me what the accounts are valued at, so it changes day to day. I don’t keep track of what those values were, just the aggregate amount, so the checking and savings values below are not necessarily accurate as of July 8 (they are as of July 9).

Tangible Assets:
House value $591,348.00
Mom’s car $27,091.00
Dad’s car $3,116.00
Total $621,555.00
Investment Assets:
Mom’s 401(k) $15,333.84
Dad’s 403(b) & 401(a) $40,855.66
Mom’s Traditional IRA $79,171.71
Dad’s Traditional IRA $151,445.20
Mom’s Roth (from when I could contribute) $6,518.89
Mom’s “fun” account (this is where I dabble in dividend investing) $283.58
Daughter Person’s 529 $4,596.30
Total $298,235.18
Non-Investment Assets:
Main Checking $11,369.96
Overdraft Savings $406.68
Secondary Checking (our mortgage sits here until it’s paid at the end of the month) $2,089.85
Main Savings $6,052.37
Total $19,918.86
Total Assets $939,709.04

That leaves our net worth on July 9 at $939,709.04 – $464,055.84 or $475,653.20

I hope I helped you understand how I calculate my net worth, and how you can too if you don’t already. The choices are in what you choose to put in and leave out of the calculations. If I left out my house value, or reduced it to the last known appraisal, it would significantly affect my net worth: -$115,694.80 for leaving it out and $424,305.20 for using the appraisal from April 2012. We’re planning on using our house as an asset during retirement (selling it and moving to a cheaper location), so I include it.

What else do folks add into their calculations or leave out that I don’t mention?

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