My husband and I sat at our dining room table after dinner one night staring at two very different spreadsheets we created. The table was a long, old conference table that we bought at an antiques auction. It was big enough to fit several people around it, but there were no dinner plates on it or guests around it that night. Instead, it was filled with stacks of papers that we pored over as we tried to make a huge decision together—the first big one since we walked down the aisle earlier that year.

This was well before we had kids, before we owned our own house, and before I started my business. In other words, we had our entire future ahead of us, and it rested on the decision we made that night.

Each spreadsheet represented a different life path. The documents were full of numbers, calculations, and financial projections trying to predict where we would be financially in 20 years depending on which option we chose.

Spreadsheet A showed what our financial life would look like in 20 years if my husband stayed at his job. We factored in retirement contributions and him getting a modest raise each year. We also calculated in our desire to one day buy a house, have children, and guessed at how much money I'd bring in with my job over time.

We tried to be as conservative as possible when calculating these numbers, low‐balling wherever possible. When we were finished, it seemed like if we were responsible with our money and kept investing, we could retire happily and send our kids to college debt‐free with the life outlined in Spreadsheet A.

But Spreadsheet B had a very different scenario. It involved my husband leaving the workforce for 10 years to go to medical school and residency training and borrowing hundreds of thousands of dollars to pay for his tuition. In the scenario we created on paper, he would not make retirement contributions while he was in school or in training, even though I would.

We looked up physician salaries in various specialties and put in the lowest one, again trying to be conservative in our calculations. We also added in the time it would take to pay back his medical school loans. We wanted to know if we would be able to meet all our financial goals if we decided to take on that much debt and risk that much lost investing time.

Interestingly, the end results of each spreadsheet were not that much different from one another. One path was predictable with annual raises and a very consistent investing strategy. (That's the power of compound interest and regularly investing in the market.) The other path, the medical school path, had a lot of unknowns and financial risk, but also more potential reward, depending on the specialty he chose in the end. In both cases, though, if things went well, we'd be able to reach our financial goals.

You can probably guess from earlier stories I shared in this book that we—together—chose Spreadsheet B that night. We sent off a deposit to officially make him a part of his medical school class shortly thereafter. It was a joint decision to take on hundreds of thousands of dollars in student loan debt and all the unknowns that came along with it. What's funny is, along the way, I chose my own unknowns, deciding to leave the workforce myself and go full time with my business.

That night, as we went through our calculations, I seriously underestimated my own earning potential. I also underestimated how mentally challenging it would be for both of us to go with Spreadsheet B. And one thing we forgot to calculate was how we would build up substantial savings along the way. We didn't really discuss how we would insulate ourselves if something happened to one of us. We didn't consider what we'd do if one of us developed a medical issue or had a chronically ill child.

Part of that is because we were very young when we sat at the dining room table with our spreadsheets. We were focusing on the hard numbers and not the intangibles. But, I'm so proud of those two young kids for running the numbers before we made a huge financial decision. Even now, the choice we made that night is still the biggest financial decision we've ever made together, more expensive than buying a house or raising kids (thus far). So, it was a good idea for us to take that choice very seriously.

As I write this, my husband is still in fellowship training. He is completing year 10 of 10 of his path to becoming a fully licensed physician. We still have a long way to go when it comes to our financial goals and a significant amount of student loans to pay back, but we're on the way there.

Every month, to keep our financial goals at the top of mind, we do a net worth calculation to see how we're doing financially. A net worth calculation shows us our assets and our liabilities. It's like a temperature reading, showing us how we're doing and reminding us of where we'd like to be.

When you're a boss with your money, you don't go through your financial life blindly. You make a plan and commit to knowing your numbers. Sure, life has a way of being all twisty and turny, and you might not end up where you thought you'd be. But having a plan is a great way to try to get there.

Whatever you pay attention to grows. Whatever you put your focus on magnifies. That's why I'm encouraging you to run your own numbers, to put your own dreams down in spreadsheet form. Nerdy? Yes. Effective? Also yes.

If you've never actually added up how much money you have right now, how many assets you own, and how much debt and liabilities you're responsible before, the time is now. As I mentioned at the end of Chapter 1, you can't move forward with your money journey until you know exactly where you're beginning.

So, I'm going to teach you how to calculate your net worth. Knowing this will help you know where you stand, and it will also help you make plans and dream big, just like my husband and I did at our dining room table when we were newlyweds.

Your net worth, not to be confused with self‐worth, is quite simply what you own minus what you owe. This is important to know for the purposes of financial goal setting. Your net worth number does not say anything about you as a person. Whether it's way in the negative or impressively positive, your net worth does not define you. It's merely a dot on a graph, a point in time. It's kind of fun to track your net worth, even if you're in the negative because you can see visual progress over time as you achieve your goals. (I realize my idea of fun might be slightly different than most, but humor me here.)

Let's say your goal is to become a millionaire. Some people classify millionaires as people who have $1,000,000 in assets (regardless of their debts). However, my definition of being a millionaire is when you have a $1,000,000 net worth. That's different from having $1,000,000 in cash in the bank. A $1,000,000 net worth means your assets (like cash, a house, and investments) minus any liabilities (like debt) equals $1,000,000. I think this is a more accurate representation of true millionaire status.

Interestingly, with this definition, you can have a million dollars in debt and still have a million‐dollar net worth so long as you have at least $2,000,000 worth of assets. Again, that's because your net worth equals your assets minus your liabilities. Wild, right?

So, just because someone has a very high net worth doesn't necessarily mean they're debt‐free. It might not even mean they have a lot of cash in the bank.

You might be thinking, “Whoa, Cat, stop with the millionaire talk. I literally live paycheck to paycheck. I know exactly how much money I have. It's the $13 in my checking account!” And to that, I say, what a great place to start tracking your net worth! It's very worthwhile and even more rewarding to start tracking your net worth when you're at the bottom. It makes the graph much more exciting when you reach the top.

Tracking net worth is a very easy exercise to complete, but it's something not a lot of people do. I encourage you to do it, though, because you're becoming a boss with your money, and tracking your net worth is all a part of your mindset shift getting there. Most wealthy people track their money and their investments. If you want to become one of them and join their ranks, this is a simple exercise to complete to get you into that mindset and to set goals of where you want to be.

At this juncture, I want to acknowledge that this net worth calculation will look different for everyone. Not everyone reading this will begin in the same place. That would be impossible. Some of you had to pay for your tuition on your own, using hefty student loans. Some of you are first‐generation immigrants trying to create a better life for your families. Many of you watched your parents struggle with money when you were growing up, and that feeling of scarcity leaves its imprint on you. Some of you are on this money journey alone as single moms. Some of you are Black Americans impacted by generations of racism and unfair treatment by financial institutions.

My goal is to be an ally to all of you by sharing my financial knowledge and encouraging you to begin this process. I know that many of you have pain when you talk about money, and that it's deep‐rooted. I know that finding out your net worth might be hard the first time. So, to reiterate, my goal is to be a support to every single one of you as a mom and as a financial educator and to help you on this journey. I believe you picked up this book for a reason, and I'm going to try my hardest to ensure it makes a positive impact on your life.

So, with that said, let me give you some examples of different net worth scenarios so you can calculate your own net worth and find out where you stand today.

Examples of Assets

• The market value of your house
• Your car
• Cash in your checking account
• Cash in your savings accounts
• The total value of your retirement account(s)
• Any other investment accounts
• Rental properties
• Vacation properties
• Company stock

Some people also include valuables like jewelry and art in their net worth. For me, I only like to include things that are liquidable, things that are cash or could convert to cash with a sale. For example, I'm not going to list my engagement ring in my asset column because it was my great grandma's and I'm not going to sell that. But, you can absolutely list jewelry you have if you'd like to. I'm also not going to list any art I may have because first of all, there are no Picasso paintings in my house. Secondly, the value of my art, furniture, and throw pillows is highly subjective (but I did get a really sweet deal on a Crate & Barrel couch on Facebook Marketplace).

Finding the value of your assets is pretty straightforward. You can look up the amount of money you have in your bank accounts and investment accounts on any given day. You can also look up the value of your cars on Kelley Blue Book. Usually, you'll get the best price on Kelley Blue Book if you select the price for private sale.

If you need to know the value of your house, but you haven't gotten an appraisal lately, you can ask a realtor what they'd list it for if you put it on the market today. Or, you can look up your address on Zillow for a ballpark estimate (although keep in mind that it's just that—an estimate).

Put all these numbers neatly in a spreadsheet and add them up. That's how much you own. Now, let's add up how much you might owe.

Examples of Liabilities

• Credit card debt
• Mortgage loan
• Student loans
• Car loans
• Wedding loans
• Personal loans
• Money owed to friends/family
• Back taxes owed

It's a good exercise to go through and find out the exact amount of your liabilities. If you aren't sure how much debt you have, a good place to start is to pull your credit report. You are entitled to a free credit report every year from each of the three main credit bureaus. Go to www.AnnualCreditReport.com to access it. There, you'll find each and every one of your accounts and debts listed.

On your credit report, you should see the name of your servicer. That's the entity that's in charge of collecting payments for your loans. At the time of this writing, you can also use the National Student Loan Data System (NSLDS) to see your federal student loan balances. The federal student loan system online is reportedly about to undergo a facelift in an effort to make student loan repayments more streamlined. Go to https://studentaid.gov/ for more information.

Once you have all your liabilities in a list, add them up. If you have a lot of them or you've never seen your debts all in a row before, this step might make you cringe or just otherwise hate life. So, I want to remind you that your net worth doesn't equal your self‐worth. We're just trying to get a baseline here, a dot on a graph, so that you know exactly where your starting line is. We celebrate all starting dots around here because if you're able to put a dot on a graph, it means you care enough about your money to track it. That is a win in my book.

Next, I'm going to give you a few different examples of net worth scenarios so you can get an idea of what it might look like when you do yours and what you can learn from the information you find.

In this scenario, it would likely take Penny less than an hour to find out her net worth. The benefit of doing that is now, she has a lot of information that will help her move forward with her financial goals. Instead of being afraid to add up her debt, now she knows her numbers, and in a way, she feels relieved.

You'll notice I didn't even say how much Penny makes as a nurse. That's because you don't factor in income into your net worth calculation. Net worth is about how much money you save and invest and how much money you owe to other people. So, it's very possible someone who makes $40,000 a year with a great savings account and no debt could have a higher net worth than someone who makes $100,000 a year, has no savings and $10,000 of credit card debt. In other words, net worth isn't about what you make. It's about what you do with the money that you make.

When I look at Penny's net worth calculation, I actually see a lot of positives even though she's in the negative when it comes to her actual net worth. First of all, she clearly sees the importance of saving. She has an emergency fund and she even has a separate account with Christmas money in it. She's taking advantage of her employer's retirement account, and it's growing and will continue to grow.

Penny now realizes she owes more on her SUV loan than what her vehicle is actually worth. So, if she was thinking about buying a new car sometime soon, calculating her net worth might encourage her to keep the one she's driving a little bit longer. After all, if she buys a new SUV with a loan, not only will she lose money on her current car if she sells it, but it's possible she will add tens of thousands of dollars in a car loan to her liability column, putting her net worth further in the negative.

Taking less than an hour to fill out her net worth sheet could convince her that maybe her SUV isn't that bad after all. Plus, it can help her see the possibility that once she pays off her car loan and credit cards with money from all those extra shifts, she'll only have her nursing school loans left in her liability column. That can make her net worth skyrocket and put her on the path to achieving her goals.

For Penny, I would recommend that she keep working those extra shifts until her credit card and car are paid off. With a lot of dedication and focus, this can happen faster than she thinks. Once those are paid off, I'd recommend she add more money to her emergency fund. With three kids at home, $2,500 isn't enough especially if you deal with more than one financial surprise in a month. Given the unexpected nature of life, a great goal would be to have a six‐plus‐month emergency fund.

In the past, I've always recommended people have a three‐ to six‐month emergency fund. Now that I'm writing this book during the Covid quarantine, I see the value in having six‐plus months in savings just in case. She'll also need a strategy to pay off those nursing school loans. That might mean refinancing them to a lower interest rate and waiting to buy a home until she's much more ready. There's absolutely nothing wrong with renting and allowing your landlord to pay for those big home repairs while you use your money toward your next financial goal. There's no rush when it comes to homeownership. It's a fantastic goal to have, but it's one you want to be fully ready for when the time is right. Also, since Penny has been working hard and going without self‐care or a vacation lately, it would be a good idea to create a savings account just for her, similar to her Christmas savings account. She can add money to it every month and then use it for a quick weekend getaway or a mall trip to buy a few new items. If she sets it aside and saves for it, it will help her to not feel guilty about using that money on herself instead of her debt. When it comes to money, there has to be some sense of balance. It's okay to reward yourself with small things, especially if you have a few years before you're able to accomplish all your financial goals.

Now, let's look at another net worth scenario.

When Jazmin and Josh complete their net worth calculation, they'll notice they have a net worth of $50,450. It's a good feeling to have a positive net worth. It doesn't mean they're debt‐free, but it does mean they have more assets than liabilities. For Jazmin and Josh, it looks like buying a home was a good investment. Their house is currently worth more than what they owe on it. However, because they recently used all their savings to pay for a down payment and other fees to buy the house, you'll notice that their available cash in checking and savings is very low. They also have student loans and a small amount of credit card debt. But, they're making the right choice by participating in retirement plans. Because they're young, at only 24, they haven't been out of school for very long. So, they don't have a lot in retirement, but it's a good start. It also looks like Josh has a paid‐off car, while Jazmin has awhile to go to pay hers off.

When I look at their numbers here and when I think about Jazmin's curiosity about becoming a stay‐at‐home mom, a couple of things come to mind. First, although they have a positive net worth, a lot of their money is tied up in their house and in their retirement accounts. They need to increase their cash savings before they do anything else. Not having solid cash savings when you are a new homeowner is just asking for problems to happen. So, in this scenario, I'd encourage them to take a few months to stockpile cash both for their home and for their new baby.

Next, when it comes to whether Jazmin can become a stay‐at‐home mom, that depends on income. As I mentioned previously, income isn't a part of the net worth calculation. Net worth is about what you do with the money you have. Her husband may be a high earner. If so, with some good habits, they might be able to save enough money over the next few months before the baby comes for them to get a better cash position, pay down some of the higher interest debt, and prepare to be a one‐income household.

If they don't have high incomes right now (which is likely since they're just starting out in their careers), it's going to be a challenge for Jazmin to be a stay‐at‐home mom purely based on these numbers. But, there's nothing like a baby to make you reassess your money habits. If staying home is truly something Jazmin wants, she's going to have to become BFFs with her budget. It will take a lot of scaling back, sacrifices, and perhaps even big moves like selling her car to buy something way less expensive, in order to make her goals a reality.

I'd recommend that this couple spend some time looking at their income, their spending, and their childcare options. Knowing these numbers and knowing their habits will help them decide on the best next steps for their family. They should also do some calculations when it comes to their investing and retirement goals. Will Jazmin still be able to contribute to some type of retirement plan, like a spousal IRA, if she chooses to be a stay‐at‐home mom? If not, will Josh's retirement investments be enough for both of them when the time comes? With a baby on the way, are they going to make sure they have term life insurance in a worst‐case scenario? Will Josh's job pay for health insurance for the whole family or will that be an added cost? Will they be able to easily afford their mortgage payment if Jazmin stops working?

As you can see, this young couple has a lot to consider. Too often, moms only weigh the cost of childcare versus their take‐home income when deciding whether to stay home with their kids. But, it's important to take a step back and look at the whole picture to make sure you can truly afford it. Jazmin should consider the value of the benefits that make up her total compensation package—things like her retirement contributions, insurance, social security contributions, and more. It's important for her to consider her future self as well as her current self when analyzing the costs and benefits of her choices.

Regardless of what Jazmin and Josh choose for their future, what's important is that they're facing the numbers now. They're taking a deep dive into their finances and they're making a plan for what they want. When you step back and do a full overview when it comes to your money, you can see when things seem out of balance. And, if you sit down and do this exercise with your partner or spouse, you can spend some time talking about long‐term goals together.

I realize that not every couple will feel comfortable calculating a joint household net worth. It's possible you want to keep your financial numbers to yourself. That decision is up to you. I personally like doing my net worth calculations jointly, mostly because it's helped my husband and me plan long‐term as a unit. It's also built camaraderie going all the way to the day at the dining room table with Spreadsheet A and Spreadsheet B.

But, based on your past experiences, you might feel strongly about having your money completely separate from your other half. If that's the case, I support you in that too. Even if you keep your numbers on different net worth spreadsheets, you can still have a lot of conversations about your goals for the future. Open communication is the goal, whether your numbers are blended together or not.

As you can see, Dana and Jimmy have some really excellent financial habits. The only debt they have is the mortgage on their house. They own their cars outright and they've built a considerable savings account. They have a solid emergency fund and an additional savings account for anything else they want to do in life, whether it's updating a bathroom in their home or taking a family vacation. They've been diligent and careful with their money, and it shows.

The next step for them is to begin investing in their own retirement accounts so they can set themselves up for success in the future. Both of them work physically demanding jobs, so it's a good idea to plan for the long term in case they want to comfortably retire in the future. At 35 and 37 years old, there is still enough time to invest and build up a nice nest egg for their later years. It is important that they start now, though.

If I were them, I would prioritize investing for their own futures over saving for their children's college education right now. There are many ways for their children to pay to go to school, but if they don't want to be a burden to their children when they're elderly, it's better to focus on their nest egg. As their incomes grow over the next decade, they can start thinking about setting up college accounts for their kids. But for now, they need to learn as much as possible about investing long term so they feel more comfortable with the idea of it. With more education, they will realize that although there might be fluctuations in the market, investing for the long term for 20‐plus years will generally yield a good return, one that will help them grow their savings far more than having it sit in a savings account.

I think Dana's goal to own her own studio one day is a great idea. Owning a successful business is a very good way to accelerate your net worth growth. I don't think she has to borrow money to start it, which is her primary concern. Instead, she can start slowly by offering classes on her own, whether it's in her backyard or a local park. She can open a business account and set herself up as a legitimate business entity. Once she gets a solid business savings in her account, she can rent a small space for a few months and see how things go. She can ask her students to trade classes for any services they might be able to offer, like logo design, social media marketing, and more. If she uses her network and asks for help from the people who already love her, she could be on her way to building the business she wants—debt‐free.

Jimmy might want to look at other work opportunities in the area to find a construction company that does offer retirement benefits to their employees. It would be to his benefit to spend time reaching out to colleagues in the same industry who work at those companies. They can let him know what it's like to work in their jobs and if making a switch might be worthwhile. Investing in work‐sponsored retirement accounts is one of the simplest ways to start investing, so that could also be a good way for Jimmy to get started building his wealth for the future.

Now, let's look at Samantha's numbers.

So, first I want to say I love the goal of retiring on the beach someday. I think Christina and Samantha should spend some time researching little beach towns and put up pictures of homes they like on an inspiration board. Putting visual reminders all over the house can remind them to stick to their financial goals when they're tempted to veer off. Once they know the price point of their dream beach house, they will have a goal to aim for. They can even make a spreadsheet of how to get there, much like my husband and I did when deciding whether he should go to medical school.

Knowing a little bit of their backstory and that both had been previously married, the credit card debt and the personal loan could be a result of fees incurred during a divorce or when they needed extra money to get back on their feet. Now that they are more settled, it would be a good idea to get rid of any high‐interest debt they have. Neither has student loan debt and both have retirement accounts, which is great for their financial health.

I noticed that Christina has an RV. I don't know if they use it a lot or not, but if they don't, she might consider selling it and putting the proceeds of the sale toward her car loan, which will speed up the process of paying it off.

Once Christina and Samantha pay off some debt, they can start to think about their other goal, which is helping pay for their kids' college education. Any money they were spending on credit card payments or car payments could be used to increase their own retirement contributions, pad their savings account, or start college funds.

With the help of an accountant, they can decide on the best college savings accounts to open. Typically, parents open a 529 account or an ESA, which is an Education Savings Account, to save for college. Each option has different max contributions and tax benefits, which is why it's helpful to consult an accountant.

They can also start to map out a plan for their retirement goals, which might mean increasing retirement contributions so they have more to live off of and one day perhaps selling Christina's house and using the proceeds to buy the beach house.

Sometimes working together on money goals, especially after you've been previously married, can seem really stressful. But, one way to alleviate that stress is to talk about goals together and what each person is going to do to contribute to getting there. That discussion can be the beginning of many more money meetings where you can watch your net worth grow, either individually or together, over time.

As you can see, knowing your net worth and using it to see if you can achieve your biggest goals is an important exercise when you're getting your finances in order. There's a reason why I placed this chapter before the budget meeting chapter. It's because you need a broad view of your money and where you stand before you get into the details of your daily spending and bills.

I also like that you can see the direction your money is going when you do a net worth calculation. The goal is to clean up the liability column while you grow your asset column. Due to the wonders of compound interest, investments tend to grow on their own over the long term. But debt, especially high‐interest debt, grows too—in the wrong direction. So, the more money you can funnel into the asset column, the better for your long‐term financial success.

What's important is that you start where you are, even if your net worth is very much in the negative. Remember, mindset is important here, so even if you're in the negative, I want you to think of how cool and amazing your graph is going to look five years from now.

This is about achieving your biggest life goals and mapping out a plan to help you get there. Sure, there will be bumps in the road along the way, but if you know where you're starting, it will empower you to take the next step.

In the next chapter, I'll teach you how to conduct a family budget meeting. Managing your daily spending is an important part of growing your net worth and reaching those big, audacious boss‐mom level goals.