One of the biggest reasons I started PoundWise Journey was to track my financial progress.
Well, in my opinion, the best way to do that is by tracking my net worth.
I decided to share regular net worth reports, and I can definitely see the value. It keeps me accountable and focused because I want to see that number improve month after month.
See my first ever Net Worth Report for June 2025 here.
It also reminds me that even when the changes feel small, I’m still moving forward.
Here’s how I calculate my net worth, what I include, and what I’ve learned about assets and liabilities along the way.
What is Net Worth?
Your net worth is the difference between what you own (assets) and what you owe (liabilities).
If you were to add up everything you have (savings, investments, etc.) and then subtract all your debts (credit cards, loans, etc), the number you’re left with is your net worth.
It’s a quick summary of your financial position, whether you’re deep in debt, or building long-term wealth. Your net worth is essentially a broad overview of your finances and helps you track your progress.
Assets vs. Liabilities – What I Learned
When I first started paying attention to my finances, I had a rough idea of what “assets” and “liabilities” meant. But I didn’t fully understand how those terms applied to my own money.
That changed when I started an online bookkeeping course, where I learned what the traditional accounting definitions for these terms.
Then I read Rich Dad Poor Dad by Robert Kiyosaki, which gave me a totally different perspective on things.
His definition of assets and liabilities are based on cash flow, instead of just value, which made a lot more sense to me.
What I Class as Assets and Liabilities
When it comes to calculating my net worth, I don’t use the traditional accounting definitions of assets and liabilities. Instead, I use Robert Kiyosaki’s definitions, which are based on cash flow.
For me, an asset is anything that puts money in your pocket or increases in value over time. That could be savings, dividend-paying stocks, or anything that earns interest or gives a return on investment.
A liability on the other hand, is anything that takes money out of your pocket or loses value over time, costs money to maintain, or comes with recurring payments. So even something like a house or a car, which are technically assets in accounting terms, I’d see them as liabilities if they’re costing money each month.
But it’s not always black or white. For example, if you have a car that helps you earn money (like in a delivery job), then that could count as an asset, because it’s helping to generate cash flow.
Some people might usually include things like gold, art, or cryptocurrency as assets. I wouldn’t personally include these because they don’t provide any cash flow.
They can go up in value over time, but since they don’t earn an income, I’d see them more as speculative investments than true assets.
I might invest in these commodities in the future, but I don’t include them in my asset column because I don’t feel like they’d reflect my financial position as well.
How I Calculate My Net Worth
To keep things simple, I use this basic formula:
Assets – Liabilities = Net Worth
Every month, I list all my assets (things that bring money in or hold real value) and subtract my liabilities (money I owe).
Like I mentioned earlier, I only include assets that actually help me to improve my financial position, like savings, investments, or anything that increases in value over time.
I don’t count things like clothes, or a car (if I had one), because these lose value over time and don’t give me any cash flow.
For liabilities, I list anything I owe, including my credit cards and my ‘buy now, pay later’ catalogue balance.
It’s not too complicated, and it only takes a few minutes to update each month. But seeing that number gradually improves helps to motivate me.
Why Net Worth Matters to Me
For me, tracking net worth isn’t about chasing a big number, it’s about making progress.
Even if my income stays the same, my net worth gives me a better idea on how my finances are looking. If I’m paying off debt, saving money and making fewer financial mistakes, then my net worth will surely improve.
In a way, it’s also useful feedback on how I’m managing my money. If it isn’t improving month to month, that’s a clear sign that something needs to change. Maybe I’m spending too much, not saving enough, or slipping back into old, destructive habits. But if my net worth is improving each month, then I know I’m doing something right.
Final Thoughts
Tracking my net worth has become one of the simplest and most motivating habits I’ve built up on this journey.
It helps me stay accountable, spot patterns (positive or negative), and see any progress that’s made, even when it feels like I’m not getting anywhere.
You don’t need to be rich to start, and that’s why I think tracking your net worth is so useful. It shows that every small step counts.
And if you’re like me, seeing those numbers improve (even slightly) is a big reminder that you’re moving forward, one month at a time.