Many personal bloggers talk about how important it is to know your net worth.  Some even post frequent updates describing their net worth in detail.  While I agree that it’s important to know your net worth, it can also be more than a little depressing when you’re in debt.

Net worth is a simple equation: assets minus liabilities.  My husband and I only have a couple assets and we have one liability, so our net worth is quite easy to calculate.  (For those who have more assets or multiple forms of debt, the calculation will be more complex).

Our assets include an emergency fund of $1,000, two rings worth a combined $2,000, and two vehicles that are worth a combined $8,000.  We do not own a home and have no other substantial assets.

Our only liability is our student loan debt (we have no other forms of debt).  We started with $117,000 of loans, and our current balance is approximately $40,000.

Student loans – (cars + emergency fund) = -29,000

Looking at this number isn’t exactly enjoyable.  It motivates us to pay off our debt as quickly as possible (we hope to have our debt paid off by the end of 2018), but I still prefer not to fixate on our net worth.

I would like to pretend that net worth isn’t important, but that’s not true.  Getting out of debt matters.

Having a high net worth also matters – it enables you to save for retirement, have an emergency fund that prevents you from going into debt in the future, and to travel or pursue other passions.

While net worth is important, it certainly is not the most important thing in life.

If your net worth depresses you, I recommend doing what you can to better your situation (like paying off your debt as soon as possible), and then focusing on the more important things in life, like your self-worth, your relationships, your determination, your optimism, and your faith.

Your Self-Worth

Your self-worth should not be determined by your net worth or any other external indication of “success.”  As a human being, you are inherently valuable.

How “successful” you are is irrelevant.  What does matter is how you treat other human beings.  Your kindness, loyalty, honesty, compassion, and integrity are infinitely more valuable than your net worth.

Your Relationships

Being broke or buried in debt sucks, but money can’t buy love or friendship.  When I adopted a minimalist lifestyle and started a three year spending ban, I realized that spending money doesn’t make me happy.

So what does make us happy?  A huge part of our happiness is tied to having healthy, meaningful relationships with others.  I don’t derive pleasure from going on a shopping spree and buying useless crap that I don’t need.

When I do fun things with friends, it’s not the buying dinner part or paying for a movie part that I enjoy.  What I love is spending time with the people I care about – no matter what we’re doing.

Since I started my spending ban, I stopped spending money on outings with friends and the hubby.  We have found free things to do instead – like going to a free yoga class, having a board game night, or cooking dinner together.

These things are just as enjoyable (if not more so) than going out and spending money.  You don’t need to spend money to have fun.  You just need to surround yourself with kind, funny, inspiring people.

Your Determination

If your net worth is lower than you would like it to be because you’re in debt or you’re living paycheck to paycheck, it doesn’t have to stay that way.

With determination, you can pay off your debt and attain financial freedom.  It may take some time, but with a combination of patience and persistence, you will get there.

Your Optimism

Natalie Bacon wrote an excellent blog post called A Letter to Student Loan Sufferers.  In her post, she describes how it is possible to be happy and optimistic even when dealing with challenges in life (like massive debt).

Wallowing in regret and being pessimistic does not change your situation.  If you’re in debt, work on getting out of debt, and in the meantime, do your best to stay positive.

I like this quote: “You may be given a cactus, but you don’t have to sit on it.”  Even during the most challenging times in your life, it is possible to remain positive.

Being negative won’t change your situation.  It will only make you miserable, whereas being optimistic will make you much happier.

Your Faith

If you are a religious person, the most important thing in your life is your faith.  As the Bible says, “No one can serve two masters. Either you will hate the one and love the other, or you will be devoted to the one and despise the other. You cannot serve both God and money.”

If you are struggling financially, you can find peace in knowing that God is always there for you and that there is a deeper meaning to life.

Your net worth matters, but it is not the ONLY thing that matters in your life.