How to Track Your Net Worth (And Why It Matters More Than Your Salary)

Two People, Same Salary, Different Financial Lives

Two people both earn €3,200 a month.

One has €14,000 saved, no debt beyond a small student loan, and could stop working for four months without borrowing. The other has €900 in current accounts, €6,000 across a card and a car loan, and is one broken boiler away from real trouble.

Same income. Completely different financial position.

Salary describes the flow of money through your life. Net worth describes what's actually accumulated — and it's the number that determines whether a bad month is an inconvenience or a crisis.

What Net Worth Actually Means

The formula is deliberately unexciting:

Everything you own − everything you owe = net worth

That's it. No adjustments, no projections. A single number that captures your entire financial position at one moment.

It can absolutely be negative, especially in your twenties or after buying a house. A negative net worth isn't a moral failure — it's a starting position. The number matters far less than the direction it's moving.

Why It's More Useful Than Tracking Spending Alone

Expense tracking tells you where money went last month. That's essential, but it's a close-up view — and it can mislead you in both directions.

You can have a flawless spending month and still go backwards, because a debt balance grew. You can have a messy, over-budget month and still move forwards, because you paid down a loan and your pension contribution landed.

Net worth is the wide shot. It's the only number that captures everything at once:

• Spending less increases it
• Earning more increases it
• Paying down debt increases it
• Investment growth increases it
• Lifestyle creep quietly stops it moving

That last one is why this metric is so revealing. Lifestyle creep is almost invisible month to month — you got a raise, you feel like you're doing better, your spending expanded to match. Net worth is where it shows up: your income went up and your line stayed flat.

Step 1: List What You Own

Write down everything with real, accessible value. Be conservative — the goal is an honest number, not an impressive one.

The last row is where most people go wrong. Counting your sofa and your laptop makes the total look better and makes the metric useless. If you wouldn't realistically sell it to cover an emergency, leave it out.

Step 2: List What You Owe

Every balance, including the ones that feel too small to bother with.

• Credit card balances — the full amount, not the minimum payment
• Personal loans and car finance
• Student loans
• Mortgage — the outstanding balance
• Overdraft
• Buy Now Pay Later commitments — all of them, added up
• Money owed to family

BNPL and overdrafts get skipped constantly because they don't feel like debt. They're debt. Leaving them out is the same as lying to yourself in a spreadsheet.

Step 3: Subtract

A worked example for someone mid-career:

Twenty minutes of gathering balances, one subtraction, and you know more about your financial position than your payslip has ever told you.

Step 4: Record It Somewhere Permanent

One reading is a number. A series of readings is information.

Put it in a spreadsheet with three columns — date, assets, debts — and add one row a month. After three months you have a trend. After a year you have something genuinely useful: the ability to see whether your financial life is improving independent of how any individual month felt.

Step 5: Update It Once a Month, Not Once a Week

Check it on the same day each month — payday is easy to remember — and then leave it alone.

Monthly is the right interval for a reason. Weekly checking turns a long-term metric into a source of anxiety, especially once investments are involved and the number moves for reasons entirely outside your control. You'll start reacting to noise.

Five minutes, twelve times a year. That's the whole commitment.

What to Actually Look For

Direction beats size. Going from −€4,000 to −€2,500 is genuinely excellent progress and will feel like nothing, because the number is still negative. Track the change, not just the total. Flat while earning well is the warning sign. If your income rose over a year and your net worth didn't, the extra income was absorbed by spending. That's the most actionable thing this metric will ever tell you. Expect the line to be bumpy. It'll drop when you replace a car, spike when a bonus lands, and wobble with markets. Judge it over quarters, not months. Don't compare it to anyone else's. Net worth is heavily determined by age, country, whether you own property, and whether you had help starting out. The only useful comparison is against your own number from last year.

Frequently Asked Questions

What is a good net worth for my age?

There's no universal benchmark worth taking seriously, because the number depends enormously on housing costs, local salaries, student debt norms, and family circumstances. A more useful target is the trend: your net worth increasing year over year, with an emergency fund covering three to six months of essential expenses.

Should I include my pension in my net worth?

Yes. It's money you own, even though you can't access it yet. Excluding it dramatically understates your position and hides one of the main ways your net worth grows in your working years. Some people track two figures — total net worth and accessible net worth — which is a reasonable compromise.

Should I include my house?

Include the realistic sale value as an asset and the outstanding mortgage as a debt. The difference is your equity, which is a genuine part of your net worth. Just be conservative about the valuation — using an optimistic figure makes the whole exercise decorative.

Why is my net worth negative?

Usually student loans, a mortgage taken out recently, or car finance — all of which are normal and often sensible. A negative net worth in your twenties is common and not alarming on its own. What matters is that the number is trending upward over time.

How often should I calculate it?

Once a month is ideal. Quarterly is fine if monthly feels like a chore. More often than monthly tends to create anxiety without producing better decisions, since the number moves on timescales much longer than a week.

Start With Today's Number

Don't build the perfect system. Open your banking apps, write down the balances, do one subtraction, and put the result in a file with today's date.

That single number is your baseline. Everything useful about this metric comes from comparing future readings to it — and you can't start accumulating that history until you take the first reading.

If you already track your expenses with Portofelo, you're doing the harder, more detailed work already. Net worth is the five-minute monthly companion that tells you whether all that effort is actually adding up.