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But in order to reach your goals, you have to control the chaos. One of the easiest ways to keep track of your financial progress is to monitor your net worth: everything you own minus everything you owe.
Think of it like taking a photo of yourself every day for years - eventually, you'll be able to look back and see how things have changed. No matter where you start, your net worth is likely to get better over time.
As a financial planner in New York City, one of the first tasks I ask my clients to complete is their "current financial snapshot," an overview of every aspect of their financial situation, including account balances. Once you can see all of your money in one place, you can start figuring out what you want to do with it. Added bonus: Getting organized frees up brain space so you don't have to think about money nearly as much.
It probably comes as no surprise that I love tracking money. But I'm not alone. I've found that once clients get organized, most of them love it too.
I started tracking my expenses in college, using a small blue notebook the New York Times once wrote about. A few years later, I automated the process by linking all of my financial accounts to Mint, which I recommend clients do as well.
And then, in April 2009, one month after the stock market hit its lowest point during the financial crisis, I started tracking my net worth. That was over eight years ago, and I still update the same simple spreadsheet every month. I use Mint's monthly summary emails to help make the process even easier.
Here's how I do it: