Net Worth Calculator

Downloadable Net Worth Template

What should your ‘net worth’ be?

Why is it important to know your ‘Net Worth’ and set up a budget and create achievable SMART goals:

Well, we decided it was important because Stephen and I basically didn’t have any financial goals as we looked towards the future. We had saved the 25% down payment for a home, bought a home, were maxing out our Roth contributions, saving in our employer retirement plans, paid off debt, and were trying to figure out what the next step would be. As we scratched our heads staring at one another, we both knew that the one thing we wanted more than anything was ‘financial security.’ We didn’t want to feel this tinge of anxiety that we had always felt about money. We didn’t want to feel fearful of the future always wondering whether or not we would be ‘okay.’

So to get a hold of things, we moved from trying to follow the ‘rules‘ and do the right thing with our finances to building a vision for our family’s finances.

At the same time, I came across the book, “The Millionaire Next Door” by Thomas Stanley and William Danko. This book is a discussion and an analysis of real life actual millionaires whose ‘net worth’ is over $1 Million. The book surveys these millionaires and ask them what are some rules of life that everyone should live by.

Before reading this book, Steve and I were scratching our heads staring at one another and asking our financial planner (who couldn’t answer any of the questions for us… whether we should be saving, spending, or just taking more vacations – obviously this one is a YES.)

After reading this book we came across the Net Worth Calculator & Goal setter. The book says if you are over 40 years of age, your net worth basically should be:

Net Worth Target = Age * Annual Pre-tax Income / divided by 10.

Although we are not 40 yet, we have used the formula to start setting goals, and started meeting monthly to see where we are at towards our goal, and where we are missing the target.

Follow along with us on our journey at the IG account: financialdaydreamer.