Software Review: Net Worth Tracker

I registered this morning at NetWorthIQ.com in order to take advantage of their free software that allows you to track your net worth on a monthy basis. Registration takes less than two minutes after which a confirmation email is sent you must click a link to activate your membership. There is an option during registration to have them send you an email once a month to remind you to update your net worth. It is also possible to display a graphic of your net worth on your own website, which is customizable. You must choose "allow public display" in order to place a net worth graphic on your website.

The entries include your basic assets and liabilities. The "Cash" item is not broken down into checking, savings, or money market accounts, so you must group these items together, then enter the total on the line. Next is Stocks, Bonds, and Annuities. These items are the non-retirement, non-tax sheltered accounts. There is a seperate line item for Retirement assets. Real estate, Cars, Personal Property, and other round out the mix of assets. Personal Property might be less confusing if re-titled to "Personal Assets". These should include higher ticket items like jewelry, furs, electronic equipment, ect. It is not worth the extra time or effort to get an accurate value of your 10 year old Wranglers. Remember, these items are to be considered for their "fair market value" and not what you initially paid for the item at the store.

Liabilities listed include Mortgages, Student Loans, Credit Cards, and Other. The amount you place in the mortgage line is the balance of your mortgage remaining, and not your monthly mortgage payment or the original loan amount. Credit cards entry should be left blank if you pay off your balance in full each month. Only balances that carry over are considered current liabilities. Finally, the other category. Don't include monthly utility bills, rent, cable, internet, or others of the like. These are considered current liablities, because these services are offered month to month. These services simply end if you decide to discontinue. You don't have this option with a car loan or a home loan, which are long term liabilities (>1yr).

The program is very easy to use although fairly basic. An icon next to each line item that would open a small secondary window with a short description would be very helpful to those who are not familiar with financial statements or how net worth is intended to be used. Net worth is what an individual would have left after all personal assets are sold for their fair market value, and all liabilities (debts) are paid off. This is a good eye opener if you ask yourself "What would I have left if I lost my job tomorrow?"

Overall it is a good program and helps people keep more aware of their finances and will make them more aware of long term goals. The one monthly reminder email is handy to update your net worth. I'd recommend this interactive program to anyone who would like to get in better shape financially.

-Tim Haibach
PFDaily