It is time to shift our perspective and start valuing our self worth over our net worth!
Net Worth Definition
Net worth is typically defined as one’s assets minus liabilities. Assets would include, retirement accounts, cash savings, and a home’s value. Liabilities would include all debts that are owed, such as car payments, mortgage debt, medical and credit card debts, etc. Check out https://thatsciencecouple.com/stock-market-investing/ for more information on which accounts to include in your net worth calculation. However to get a more realistic look at where are you stand financially, you should not include home value into your assets until the home is being sold. After all, it can only count as an asset when you sell the home and live somewhere else.
Net Worth Calculator
Take a look at the net worth calculator here: https://www.bankrate.com/smart-spending/personal-net-worth-calculator/. It is a great way to see where you are at financially. This will allow you to periodically check in with yourself and make sure you and your family are making progress toward your financial goals.
Self Worth Definition
This term can mean many things to many people. It encompasses more than any financial assets or liabilities one has. It can mean self-esteem, self-confidence in one’s abilities or morals, pride and/or dignity. This term can encompass one’s career, hobbies, family values, religious attitudes, and more.
Net Worth does not equal Self Worth
Often during the financial independence journey, we can sometimes view our net worth as all-encompassing of us as a person. False! You are so much more than any number in your bank account. Your net worth is just one small part of your big picture. Never equate the two. You have much more to offer the world than simply what is in your retirement accounts. Focusing too much on the minutia of financial statements can make you “miss the forest through the trees”, and give these things much more weight than they actually have if you were to zoom out on your life as a whole.
