Do you include savings/checking account in net worth?

[MarieIG]

Not checking accounts, they are always in flux, and not the smaller saving accounts that I use to "feed" my checking accounts at tax time. My DF used to keep at least six figures in his checking account but that is not the case with me.

 

[SecondCor521]

+1

Why would these assets not be counted in net worth? Pretty sure the IRS will count them when valuing one's estate.

I can confirm that they do. My Mom's estate attorney even asked us about "cash on hand", which I imagine technically also includes change under the sofa cushions. Since it was six months after the fact we sorta estimated. The attorney dutifully included that in all of the relevant totals and paperwork. Given the small number it was not material to anything, but my Dad wanted to do everything by the book as much as possible and so I respected his preferences.

 

[street]

For me net worth isn't something I track like I do my portfolio and cash/savings accounts. I do include checking account and any savings account that makes interest so I get an accurate number to see where I'm at each month/year.

In net worth everything goes in, too come up with NW.

 

[Cobra9777]

I include checking and savings in NW. Our cash allocation is currently at 3%, with most of that at Ally and the rest in our CMA at Fidelity. Not a huge sum, but certainly easy enough to include for completeness.

NW has been a useful tracking tool for us mainly due to rental real estate transactions and the fact that we plan to downsize our main home by about half at some point. Under those circumstances, it is important to keep an eye on all the pieces. YMMV.

 

[CRLLS]

As a matter of simplification I do include bank accounts in my NW calculations. It is done linked automatically in my Fidelity Full View webpage. Why not? Since my investment accounts vary on a daily basis, why not include my bank account that also varies? It doesn't include checks that I have written and not cleared the bank. nor does it include payments that I have scheduled in the future.

Funny though, I don't consider my credit card accounts. I'm funny that way.

 

[Fedup]

I don't have a clue what my net worth daily, I only know roughly. I don't have Quicken either. It's impractical especially if you have real estate. Who knows how much its actual value until you sell it.

 

[Surewhitey]

I do, but on the home I stopped the appreciation about 6 months ago. DW calls it "funny math" when I put a basic appreciation %. I likely have a $50k under estimation on my home for this reason...

 

[mystang52]

I only keep about $1000 in my non-interest-paying checking account. I don't count it because it's always a low amount and it is by definition meant for short term spending. So, I don't count checking, or my house value, or my sinking find for future expenses (e.g., future new car purchase). I'm not concerned with Net Worth, per se, but rather my total [spendable] assets for purposes of determining SWR.
My sinking fund is money that will likely be spent in the next several years so that shouldn't be considered part of "net worth." I have to live somewhere, and frankly I like where I live. So, it's unrealistic to put a value on my house when I don't intend to leave any time soon.

 

[RetireAge50]

Nope. I mean I would if I calculated my net worth but I don't.

 

[Scuba]

Since you are calculating net worth then definitely. Also include any credits card outstanding as reductions.

+1

 

[Luck_Club]

I don't have a clue what my net worth daily, I only know roughly. I don't have Quicken either. It's impractical especially if you have real estate. Who knows how much its actual value until you sell it.

Couldn't agree more. Complicated asset structures make a monthly net worth calculation very difficult and time consuming to say the least.

Checking and Savings accounts. Balances are way to high right now. As another poster said "if the balances get below $20K, I feel like I'm living paycheck to paycheck."

 

[Nightcap]

Absolutely. In addition to settlement accounts, I have two sizable savings/checking accounts with 18-24 months worth of expenses. It’s part of my hedge against sequence of risk. I’ll reduce it once we start collecting SS.

 

[GalaxyBoy]

In what context is the "net worth" you are inquiring about?

Straight net worth includes checking accounts, the coins in the cushions, the car, the yard sale value of the clothes in the closet, etc.

Or are you considering the total value of assets used to calculate a withdrawal rate, perhaps? In that case, I include everything in the bank, the brokerage, etc, including the checking account, but I don't bother with the money in my wallet at any given time. It's just too little to futz with.

 

[bclover]

Nope. I mean I would if I calculated my net worth but I don't.

+1

 

[Car-Guy]

Absolutely. Never even crossed my mind not to count them.

 

[Texas Proud]

Since I rarely actually calculate net worth it is kinda moot for me...


When I calculate investable assets i do not really care as I do not worry about the money I have... I am mostly less than $10K and lots of times less than $5K and that is not enough to worry about...

 

[6miths]

Net worth = assets - liabilities

Checking and savings accounts are assets.

+1

So yes.

 

[Rambler]

My checking accounts are assets, so if I'm really doing a down to the dollar accounting, yes, I'd include it. That said, I can't remember the last time I got into that much detail. My checking accts are probably less than 1/1000 of my total net worth. I do include my homes and Motorhome(even though it is a depreciating asset) in net worth calculations, because eventually they'll all be sold and replaced with something much smaller and less expensive.

 

[calmloki]

As with NW-Bound I include credit card balances as well as all bank accounts. All properties, including both homes, are valued according to current tax appraised value. Don't include cash, cars, possessions. But that is just me.

 

[Fedup]

Current tax value doesn't work in California. It's usually a lot less than what's the house is worth. I'm glad it's a lot less. But it's not accurate.

 

[marko]

One volatile day in the market can change my NW by as much as $15K-$20K plus/minus. My checking balance changes day to day as well.

As such, the amount in my checking really doesn't impact my NW all that much by comparison. Unless I want to know my NW every single day or go out to the n'th decimal it doesn't matter.

My checking balance is about 0.05% of my NW

 

[Golden sunsets]

Checking account and emergency account balances are included in my NW calculations but not included in my "investment portfolio" which generates a return that is either spent or reinvested.


Sent from my iPad using Early Retirement Forum

 

[donheff]

Net Worth is a specific financial term/concept. It includes all current assets (even the change in your sofa) minus all current liabilties, if you want to plan you finances excluding your checking balances that is fine, just don't muddle Net Worth into the discussion.

Just my opinion.

+1 If you are calculating something else (e.g. portfolio value for SWR calculations) call it what it is.

 

[audreyh1]

Quicken show me my net worth whenever I get quotes and download transactions, so there is no effort.

 

[Toocold]

I track my NW every quarter and I include checking and savings accounts. The only thing I do not include are personal possessions. I include my house and cars.