3 Apps to Increase Your Net Worth
BY TAYLOR VEST
I know, I know – money isn’t fun to talk about. Until you know what you’re talking about, and then it can be incredibly empowering.
What is Net Worth?
According to Forbes, net worth is assets (what you own) minus liabilities (what you owe). Your net worth isn’t about your income; it encapsulates your savings, investments, and debts.
Why Should You Know Your Net Worth?
Net worth is a measure of financial health. When it’s tracked over time, it will evidence progress you’re gaining towards saving and paying off debt. Net worth provides a comprehensive picture of your financial standing, all in one place. Since I started diligently tracking my net worth in January, my net worth has doubled. I attribute that increase to having an initial goal ($100,000) and doing whatever I can to get there. Sometimes sacrifices towards the goal look like returning a dress I bought impulsively and didn’t actually love or picking up an overtime shift. I love love data and always say, “if you don’t track it, you can’t change it.”
1. Personal Capital
This app is the motherboard of personal finance and tracking your net worth. Personal Capital allows for all your accounts to be linked in one central location. Your cash (checking, savings, HSA) and investment (Roth IRA, 403b, 401k) accounts equal your assets, and your liabilities are debts (mortgage, credit, loans). What I love most is the easy-to-digest dashboard: budgeting, cash flow, portfolio balances, and net worth graph, and the ability to view all transactions and activity within your accounts.
Before this year, I had absolutely no idea about investing. I knew I was contributing to my 403b but didn’t know much else. Once I started to care about finances and started learning more, it didn’t take me long to realize that investing is essential to creating wealth.
According to their website, “Betterment is a smart money manager and the largest independent online financial advisor that serves one purpose: to help you make the most of your money. When you invest with Betterment, you are invested into a globally diversified portfolio of index-tracking exchange traded funds (ETFs). Based on your desired level of risk, Betterment recommends an optimized portfolio and manages buying and selling the funds in that portfolio for you. Betterment also provides advice based on your goals and the time or amount you want to invest.”
Betterment has tons to offer, but I use it mainly for the Safety Net and the General Investing.
The purpose of the Safety Net is to establish an account that you can withdraw from in the event of an emergency (loss of employment, unexpected hefty medical bill). The benefit to having your emergency fund invested in the stock market is that the goal is to beat inflation. Your money loses buying power when not invested. For example, an item that costs $100 today will cost $134.39 in 10 years, assuming the three percent inflation rate. In 20 years, the same item would cost $180.61, a 55 percent increase. A dollar today is not the same as a dollar in 10 years.
For General Investing, Betterment asked a few questions about my desired level of risk and then did all the work for me. Thanks to Betterment, I didn’t have to decide any allocations, but I have the ability to view all of the activity and performance easily. I have a goal for this account of $1,420,000 by July 2059. I have a recurring weekly deposit of $185.25 and am on track to reach that goal.
Below is also the goal forecaster, which is so helpful in knowing if you’re on track towards your goal or if you need to adjust your contributions.
I have exhausted nearly all the budgeting apps – Mint, YNAB, Simplifi, EveryDollar – but Copilot is QUEEN. To begin, I synced my accounts, and Copilot offered recommended estimates for each designated category. Of note, I do not use Copilot to establish my budget (I use the MoneywithKatie Wealth Planner to develop my budget – another post for another day), but I use Copilot to keep me on track and to adjust as necessary. For example, this month I had to buy a new desk chair, which was (gasp) $600. My significant other enabled me to recognize the more expensive, highly-reviewed chair as an investment in my health/posture. He’s had it for 9 years and swears by it. There wasn’t $600 in my business expense budget for a new chair, so I moved some other categories around to account for the purchase. The app is easily adjustable and easily editable. It allows for transactions to be split, which was always difficult for me for other apps. I would go to Target and get items from various categories but wasn’t able to allocate the purchases to the correct categories. It’s easy to generate your own categories and review every transaction to place it in the correct category. You’re able to track your accounts, transactions, budget categories, recurring expenses, and income.
I fully acknowledge that budgeting, investments, saving, and debts can all be incredibly overwhelming, and there are days when I don’t want to open the apps either because I fear what it will show me. BUT what I’ve learned is we have to know where we are to move forward. Your future self will thank you for considering finances now! The best day to start was yesterday, and the second-best day is today. It only has to start with one small step, and I truly believe these apps are a manageable first step.
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Betterment’s Investment Philosophy & Principles of Investing. Betterment. (2019, April 10). https://www.betterment.com/resources/investment-philosophy/.
buyupside. Inflation Calculator – Save Enough to Account for Inflation. (n.d.). https://www.buyupside.com/calculators/inflationjan08.htm.
Marquit, M. (2021, May 19). Net Worth: Your Own Personal Balance Sheet. Forbes. https://www.forbes.com/advisor/investing/what-is-net-worth/.