Today’s New York Times had an article on people who closely track their net worth and then publicly disclose the figure online. The article was titled Net Worth Obsession. Many personal finance bloggers would fall into this category. I keep track of my net worth to have a rough picture of where my finances are at any one point in time. I try not to compare myself to other people, but I recognize that the human tendency is to compare.
I was a little surprised by the negative comments on the NY Times Bucks Blog… many people seem to equate the net worth trackers as people with misplaced priorities and judged the individuals featured in the article as poor souls who don’t really understand that the wealth of life comes from friends and family. Or perhaps they take issue with the fact that people have publicly disclosed their net worth. The article (and the comments) gave me much food for thought.
Previously, I’ve shared my net worth on this blog (although I don’t think I will continue). I’ve started with a negative net worth, and now I have a positive net worth. When I take on more debt to go to graduate school, my net worth will decrease. But neither I, nor do I think the other personal finance bloggers that I know, believe that we’ve gained any value as a human being simply by virtue of our debits and credits. It’s a little jarring to think that others might look at this blog and peg me as “money-obsessed.” Because I don’t think personal finance is about the blind pursuit or accumulation of money, at all. Net worth is an important financial measure, and as such it’s a good idea to know your general net worth and reasons behind its increase or decline.
My mother knew her net worth and all the ins and outs of her money, but you bet your bottom dollar she knew exactly what money means and what it doesn’t.
Let me tell you a story about my family. My grandmother (my mother’s mother who essentially took care of me when I was young) fell ill with Stage 3 lung cancer in 2004. She lived overseas and was thousands of miles away from us. My grandmother bravely underwent chemotherapy and radiation treatment, but eventually the cancer metasized to her brain. (Incidentally, she has never smoked a day in her life. We figured it might be the second-hand smoke from my grandfather, who quit after smoking for 35 years and never got lung cancer).
My mother took off several months within the space of two years to take care of my grandmother, see her through the medical treatments, and coordinate the in-home care that she needed. The only reason my mother could take off those months, unpaid, was because 1. she saved enough money so that she didn’t have to worry about paying the mortgage or my tuition bills while her income was on hold, and 2. the U.S. law allows unpaid leave for family care (while preseving a job for her to come back to).
Some might look at the way that my mother live and say that she is too frugal, or that she doesn’t know how to enjoy life. My mother doesn’t care for a big house or new cars. She is still driving the 1993 Honda Civic with a broken AC and manual windows. One of her greatest pleasures was reading newspapers in bed. She is very clear on the state of her personal financial situation – she knows her assets and liabilities inside and out.
My grandmother passed away in 2006. To this day it’s still difficult to think of her passing without tearing up. I would have loved to have her live a happy and healthy life, filled with friends and family (she was so loquacious!), and be there to see me walk down the aisle or toss my graduation cap off into the air. But I am comforted, more immensely than I can put into words, by the knowledge that my mother was there by my grandmother’s side through the end, and that they were able to spend those last months together. What a gift to give my mother has given to her mother, to herself, to her daughter, and to her family.
Sometimes I worry that writing (and by extension, thinking) so much about finances will render me too concerned with money or net worth or numbers that say very little about who we are as people. But then I think of my mother and my grandmother, and it becomes very clear. How we spend (and save) money is a large part of how we live our lives. How we grow (or not grow) our net worth is an important aspect of our financial situation. So I reject the notion that concern over one’s finances translates to obsession with money or that by keeping track of net worth we are conflating a financial measure with our self worth.
Caring about money, understanding money, and wanting to grow one’s material wealth do not mean that one forsakes the wealth of friends or family. My mother is not money-obsessed. She simply has made the decision that by taking control of her finances, money will never be the arbiter of the most important decisions in life. That’s what I want. And that, I think, is what we all want.
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What a great story – thanks for sharing. That's precisely what money means to me – offering me the freedom to live my life the way I want to.
Thanks for sharing your story. And thanks for highlighting the NYT article. I'll write about this topic as well in the future. But in short, I will never reveal my entire net worth either.
Hope all is well!
A very well written and thought provoking article. I come from a long line of labourers. My grandmother was widowed young and worked 3 cleaning jobs to support 3 children – one of whom was disabled and needed constant care. She retired with nothing and often had barely any food in her home. Yet she was the first to offer her last $5 to anyone who needed it and always made sure we were fed and happy.
My parents too spent most of their lives on minimum wage just trying to make ends meets. They worked hard to make sure we had a good start in life, and I think that's what everyone wants – to make a better life for their children. I'm striving to better my financial situation so that one day I can take care of my parents and give my future family a great head start in life. I want to make sure everyone is taken care of.
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Wow, those people in the comments just don't get it. Of course your worth as a person is more than your assets minus your debts. That's why it's net worth, not self worth. Maybe they're George Bailey and an entire town would be willing to donate a few thousand dollars, but my guess is not. Plus, the amount of money in my accounts is a lot easier to quantify than the number of people I know and how much money they'd be willing to lend me.
I think so many of us in this generation were taught the wrong things about money– or nothing at all— that any healthy focus on personal finance is a much-needed step in the right direction. We need to take responsibility for our financial future and not let our finances own us. I recently bought a home and was surprised to see that with my negative net worth on the worksheets, I was still considered a "prime" buyer. Great work on this blog. You are an inspiration!
great post! i really enjoy your blog, particularly posts like this that highlight a very personal approach to personal finance.
As with anything, I think that the way people think, talk about, and track their finances and net worth can viewed on a spectrum. There are people who NEVER think about money, much less talk about it, don't track their finances and have absolutely no idea how much their networth is. That is irresponsible and to some degree – unhealthy. Likewise, there are people who ONLY think about money, talk about it incessantly, and track dollars the way an anorexic tracks calories. Their self-worth and their net-worth are one and the same, and this too is irresponsible and unhealthy.
MOST people fall somewhere in the middle, but those who are part of the latter tend to view everyone else as being part of the former.
You definitely bring up some really interesting points here. Money is one of those topics that everyone has an opinion on, and there never is one right or wrong opinion. And obviously everyone is entitled to their own opinion, and to do whatever they want with money. Everyone has their own priorities, so to one person living at home with their parents in order to get large amounts of money might be exactly what they want, while another person might rather live frugally on their own so they can have independence from their parents.
I like a middle of the road approach, where I know about how much I have (my husband and I have a budget spreadsheet set up), but we don't track a lot of things that other people might in our budget (like retirement, what our condo is worth, etc.). My personal goal is to not have tons and tons of debt (which will change a bit when I start grad school, and that will be better debt than say credit card debt), and to just live life to the fullest and be as happy as I can while I'm living. But at the same time I am planning for the future, so it's always a delicate balance.
Agreed with: "But neither I, nor do I think the other personal finance bloggers that I know, believe that we’ve gained any value as a human being simply by virtue of our debits and credits." whole heartedly.
I do it for myself to keep on track.
I like knowing it, but it doesn't change anything for me. All I really care about in the end is having savings, having no debt and living the way I want.
I just recently started tracking our 'net worth' more closely. The reason I am doing it is because we are down to one income and also, the more information you have, the better able you are to make decisions.
I know some bloggers do post their net worth, but I never took it as a way to brag or be obsessed, but to possibly motivate others or maybe because it made them more accountable and would make better decisions for themselves. Kind of the same reason people keep a food diary and share it. They won't eat that cookie if they know they will have to tell everyone about it.
Great post!
I agree with most of the commenters here that my net worth is not an obsession. The end result is not to accumulate as much money as I can, and deprive myself, or detach myself from my family and friends. It's simply a matter of prioritzing.
There are always trade offs in everything that we do, and money is simply one of them. To me, money is a tool that I can use to achieve financial freedom, and to do what I like to do. I could trade time or a I could trade personal enjoyment, or things, amongst other.
I like to keep track of my net worth (approximately) to keep me on track, and make sure that the decisions I am making financially is in line with my happiness and how I want to live my life. I'm a big believer in that one can have it all – but it may not be all at once.
What a very touching story. Thanks for sharing it. I like to remind myself that money is important, but not the most important thing in life. With a finance blog, it's easy to overly obsess over money details. But at the end of the day it's good to remember that money is just a tool, a means to an end. Your mom seems to understand that very well.
I'm coming to the conversation a little late, but I love this post. This is an excellent point and I think a lot of people confuse the importance of knowing about your finances (so you can live the way you want/choose to) and being obsessed with money. Money is not the end point.
Money is so interwoven into our lives that even if you don't write about it, you still have to think about it each and every day. Those who choose to avoid thinking in depth about the consequences of their action aren't any better off than those who consider their money choices. I see where the article is coming from and understand the net worth trap, but I doubt most bloggers place their value on a sole number (or at least I hope not). Examining the issue of money and learning about it should have the dual affect of realizing what money is and learning about how to manage it in your life without it being your life. It sounds like your mother was quite good at this as well
It's ironic that the Wall Street journal would shame the blogosphere for tracking personal net worth. Because Wall Street is far beyond corrupt. And that's all THEY care about, is money. What do THEY know about friends?
Obsession is a pretty steep word. I always considered myself financially obsessed by definition I shamefully admit, but I like to say that in a positive light. Because I have 'fun' with this subject. I love talking about it. I can't get enough of it. I want to master it and be out of the proverbial rat race, so that I don't have to indenture myself as an employee for the rest of my life. THAT wouldn't make me happy, that's for sure!
I track my money because I don't want the question of 'How Much?' to come between me and what I want to do with my life. Recently, my bofriend and I were considering moving back west, towards Alberta, but considering our finances, and the idea of not having jobs for a bit when we get there made us reconsider. Debt sucks.
What a great post. I sometimes wonder if my obsession with savings clouds my ability to enjoy life. I might cheap out on some stuff, but I know I like to spend money for things that make me happy, spending time with family and friends, going to concerts and travelling. We can get a bad rap for constantly thinking about money, but we are only being cautious because you never know what happen in the future.
A little late to join the conversation. Thanks for sharing this story, it highlights the personal perspective of personal finance.
As someone who tracks the networth, I was a little offended by the article. Personal finance is very personal, so comparing the networth won't do anyone any good. But knowing my networth for my own good is priceless. I can plan for my future better. I am not saying just knowledge of my networth somehow magically bring joy to my life, but it definitely puts my priorities in perspective and also keeps me on track of my goals.
Its an interesting article but I don't understand the need to make their networth public. Please don't get me wrong, I'm not offended by the article, but I don't get why they display their networth for all the world to see. I do think its important to keep track of networth for your own personal finances.