When it comes to keeping track of your financial accounts as well as your net worth, using online money management software may not be your best choice. Sure, there are benefits to using sites like Mint and Yodlee.com – the greatest likely being automatic updates to your balances.
Still, these sites aren’t perfect. There are drawbacks to using them – which is why I stopped. Instead, now I track my net worth using a simple Excel spreadsheet that I update monthly.
Here are five benefits of tracking your net worth on your own.
1. Get better accuracy.
I recently logged in to my money management site and tried to add my 401(k) account from work, but the site didn’t recognize it.
Even if it did, I wonder, “Would it track my overall balance, or my actual vested balance?” I’m more interested in the true value that’s available to me.
When you track your own net worth, you get a clear, correct, and comprehensive picture of your financial wellbeing.
2. Find more complete information.
I logged in to one of my investment accounts, and noticed that I was hit with an inactivity fee!
I’m not sure if these sites would’ve caught this and alerted me. Normally, I’d just log into the money management site, notice that the balance would be a bit lower, and assume that it was due to everyday market fluctuation.
When you log into your financial accounts one-by-one, all of the details are there for you to see. That way, you can take action such as dispute a charge, or ask to have a fee removed as a one-time courtesy.
3. See opportunity.
As I logged into the credit card site to update my spreadsheet with the current balance, I stared at my credit line. Then I thought to myself, “I don’t remember the last time I asked for a credit line increase.”
So I called the company and asked for more credit. It worked.
Increasing your credit line can help increase your credit score, which in turn can get you lower interest rates. This helps if you’re in the market for a major loan, such as a mortgage. You’ll end up paying a lot less money.
When you log in to your financial accounts one-by-one, you may find opportunities to save more money.
4. Receive inspiration.
When I log into my money management site, I usually just glance at the numbers, see if they’ve gone up or not, and then log out. But the very act of updating the balances in each of my accounts using my spreadsheet inspires me to keep working hard to grow my net worth. It gives me something to look forward to at the end of each month.
When you log into your financial accounts one by one, you could get encouraged to keep moving forward and building your wealth.
5. See your growth over time.
Sure, money management sites track trends such as the growth of your net worth over time. But with my own spreadsheet, I can include calculations that these sites don’t – such as a percentage change in net worth by month, quarter, or year.
When you track your own net worth, you can set up your spreadsheet to include trends that you want, and exclude the ones you don’t want – so that it makes sense to you.
Can you think of other reasons why it’s better to track your net worth yourself? Leave a comment!