The Vault with Financielle - UNLOCKED: Why Everyone Should Track Their Net Worth (Not Just the Rich)

Episode Date: January 27, 2025

Send us a text💸 Welcome to The Vault Unlocked – a special bonus series of The Vault Podcast, where we deep dive into the big money topics no one wants to talk about.Today, we’re tackling net worth—and no, it’s not just for celebrities or the ultra-rich. Tracking your net worth is the ultimate financial move, no matter where you’re starting from, even if you’re in debt.Here’s what we’re unlocking in this episode:What net worth really means and why it’s a better measure than incomeThe assets that matter most—and why not all assets are created equalCommon misconceptions about net worth, including why even a negative number is worth trackingHow to calculate your net worth in four simple steps and use it to growPlus, we’re sharing a community story from Hannah, who started tracking her net worth and saw her financial journey transform.This episode will empower you to take charge of your money and give you the tools to see progress, no matter your starting point.🚑 P.S. if you work in the NHS, click this link for pension calculation help: https://www.nhsbsa.nhs.uk/member-hub/getting-estimate-your-pension💬 Have a topic you’d love us to unlock next? Email us at [e-mail]👉 Subscribe to Financielle for honest conversations about money, and let’s rewrite your money story together.The Vault is an entertaining yet thought provoking podcast that answers our community’s dilemmas and confessions surrounding women and money.Visit https://www.financielle.com to download our app.Watch the podcast on YouTube.Follow Financielle for more:▶︎ TikTok▶︎ InstagramAbout Financielle:Financielle is a female focussed finance app helping women to take back control of their money, ditch debt, increase savings and invest in their future.Recorded and Produced by Liverpool Podcast Studios▶︎ Web ▶︎ Instagram▶︎ LinkedIn

Welcome to The Vault Unlocked, where I take a deep dive into money topics that no one wants to talk about. And I'll tell you who does want to talk about this topic, the rich, the rich, the wealthy, the affluent, the generational passer-downers, is that even a word? We are talking about net worth. What the hell is it? Why should I care? How do I track it? What does it mean? This is, do you know like at school where you might have had like core subjects like maths, English, science, the things that they make you do and then you can kind of pick fun ones like PE or food tech or drama whatever is like fun for you this is a compulsory financial core module you have to listen to this podcast this is a rule I'm not giving you a pass out and it's for a very very good reason or lots of lots of good reasons when we started financial

tracking your net worth was one of the first things that we got people to do when they had the spreadsheets like long before the app. Because working class and middle class people and especially women are kind of so caught up in the here and now. Sometimes that's driven by circumstance. They have to think of the here and now. It is like, can I put food on the table? Do I have enough money in my bank to make payday? I'm one emergency away from having a nightmare. I need to leave this relationship and I don't have anything else so I understand why so many of us are driven by this like short-termism but some of us it's just

habit and it's it's upbringing and it's environment and it's because we're not taught to think about the long term and we're not taught to think about the trajectory of our money like where's it heading at what pace like we just we're not taught that so it's very normal I think that the furthest long-term thing that someone might think of is like I'm saving for a house and that might be the biggest thing that someone saves for and so they're tracking that over a period of time but it's got a defined period hasn't it and then when you buy that house you've got it and it's like right okay done most of us don't really like thinking about retirement even those of you listening to this in retirement because I know we've got an amazing retiree

community. I'm sure in your head you feel 21 and I'm not this retiree and how did I get here? So today I want us to try and think about the long term. Where are we going? What are we doing? Why are we doing it? And it all comes together in a few different pieces. If you think about some of the unlocks that we've done so far, we've talked about the budget and how the budget works with financial. And we've tricked you a little bit really into thinking that it's about the month. It's about that month. And we even teased it out a little bit and talked about the fact that it extends into the year so building up your sinking funds and building that pot of money for the things that you're going to need in the next 12 months. But if you think about what we say about the excess, what are you meant to do

with your excess? You're meant to put it towards things that grow. And what we mean by that is you're meant to put it towards things that grow your net worth. So it is a trick. We're being transparent with it, but I'll guarantee if you do this method, you will forget about this trick and you'll just crack on. And it's our job to get you using a money methodology, a way of managing your money that fits the now, it fits the next week and next month and it fits like years into the future and that's the goal here and the net worth tracker and the concept of tracking your net worth and focusing on your net worth once in a while will help you do that, it really will. By the end of this episode, you are going to know what the

hell Annette Worth is, nevermind yours, just what is it, why it matters and how to start tracking it. This is about progress, not perfection. So do not feel overwhelmed. Please think I'm like holding your hand as we're going through this. This is not meant to be overwhelming. Like I've said before, I'm sat in my kitchen, on my couch. I've got no socks on for god's sakes we are friends and we're safe and this is not too formal and it's not out of your world this I want to bring net worth to your world I want to bring it to your dining table with your partner or around the coffee table with your friends you don't actually have to say how much you have if you don't want to share it with people but the concept of talking about the a word assets

you know and things like that like it's gonna it's gonna feel more normal but do not feel overwhelmed if you think this is not in my realm this is not in my vocabulary it soon will be and it doesn't it doesn't need to be like super super um full of you know jargon and complicated investment terms we're not going to get there we're not going to get there and actually just a note on that it did come to my mind then thank you to the lots of you that have messaged in and said can laura do a vault unlocked about investing and we've got some exciting news on that so we especially the team and i've been sat there thinking like how do we bring investing in when there were so many basics we had to do first and we want to ease people in and again if you like come to this pod on this episode I really would recommend like head back down the unlocks as well as obviously

the dilemma ones but we want to talk about foundations about budgeting about sinking funds about how to save about why debts like a pain in the ass we need to talk about foundations about budgeting about sinking funds about how to save about why debt's like a pain in the ass we need to talk about those because so many people jump straight to investing and either play around at it um with like a little bit of money here and there or they feel overwhelmed um because it's like not built on like secure foundations of financial knowledge or they quite frankly don't have the excess cash to put into investments. And so what we try and do is do the work upfront to help you get into a place where your excess in your financial budget is big enough that you have to start deploying it into investments. And that, those are the rules. Like

this is a financial playbook, survive, build, grow. You have to get out of survive and you have to get out of survive as quickly as possible then we'll get you in build and listen we'll let you take your time there because if you're saving for your dream home if you're saving up for a really big emergency fund if your income's not that high if you're a solo financialer lots of reasons why we'll let you kind of hang around and build a little bit you should already be doing like your minimum pension contributions and copying that if you're self-employed, that's super important. We've talked about that quite a bit, but then we're getting you to grow and you have to have an excess cash amount every month that's going into things that grow your net worth. So we're going to come on to investing in quite a

big way in the next few weeks. I'm going to ease you in and walk with you and share a bit of my journey, share where you can share a bit of my journey, share where you can start, loads of stuff. We've got so many ideas that quite frankly like we're trying to work out in what order we do them and how we parcel it up. But net worth today is where we start. So we're going to jump in with what the hell is a net worth? At its core your net worth is what you own minus what you owe. So it's your assets minus your liabilities. So many money conversations are around like the budget metrics and the budget numbers. So what's your income? What's my salary? What do we earn? What are our expenses? Net worth is this bigger picture where

you check in once a month, you pick a date for you and you go into the app and you update your net worth. And it's the reflection of the good behaviors, the good money behaviors that you have been putting in throughout the month. And every month, say if you do monthly paydays at least, but every month when you do your net worth, because you do that once a month, you should see progress. And, you know, sometimes it goes up and sometimes it goes down. It does depend on what's happened that particular month. And we'll go into that shortly. But overall, over time, if you are implementing the financial behaviors, if you are implementing a financial methodology, that net worth's going up and up and up and you can do a graph in the app um you know i've got like two three years worth of net worth trackers um tracking it looks like a an upwards roller coaster you know there's ups and there's downs but if you do like

the past three months you get like you know three metrics if you all time it looks like up down up down up down up down it looks just like ironically you know the stock market when you see these over time graphs and you see that over time it goes up it's the same thing with your net worth if you have been doing the work that we do here if you've been applying it properly you'll see that bad boy go up it's a fascinating number your net worth because it's private people don't know it so when you think about what wealth looks like and what being rich looks like you can definitely make certain assumptions do people have nice big houses do they go on lots of holidays do they have nice cars do they dress well do they have amazing cars? Do they dress well? Do they have amazing skin? Like all these, you know, there are money can buy us lots of things that are outward looking, you know, that are physical. And so you can make a pretty safe assumption that people that look a certain way, dress

a certain way, live in a certain place, probably have money. But it's not always the case. The moderate house on your street with the moderate 10 year old cars and the plain looking individuals may well be millionaires. And the house on the street with the financed cars and the nice holidays and the latest designer gear may not have much at all. They may have a lot of debt. They may have a lot of finance. They may have fallen victim to keeping it with the Joneses. And I think I make the observation because it's very normal. That is so normal. And there's no shade for living our lives in particular ways. What we don't know is the relative stress that someone may be going through though. So they may appear, this like couple, to have it all together.

Apart from any health or work or physical issues they may have going on, they may have money issues going on. They may feel this pressure to keep up and actually they're one paycheck away from the stack of cards crumbling. And actually sometimes the more we earn, the more painful this is. I saw an influence on TikTok and I never know anyone's names on TikTok it's like really weird it's not like Instagram so you're not as loyal to the creator so you know the creator but she's a twin mum who lives out in Australia she's Canadian and like a really like super aesthetic content so

um she's got an Australian husband they've got twins and they've documented their life raising twins especially i think through pandemic if i'm remembering correctly but i digress because that's not the point of this story um they live such an aesthetic life they i think rent on the gold coast and he works in sydney and he commutes by plane well not like private plane but like because you can commute quite easily um on planes in austral way so it was internal flights backwards and forwards and they had a nanny an au pair and she shared on TikTok this week that actually her husband lost his job in just before December and that she it had taken them a while as a family to process it, and so they hadn't shared immediately. Completely understandable.

And they're having to navigate this new way of living. Their au pair has stopped, although has also gone travelling, so I'm not making an assumption there, but she has transparently shared that he was the breadwinner. She makes income and provides for the family, but not enough to pay for this beautiful rental in on the sunshine coast and I think near Byron Bay even and um not enough even to pay like for rent anywhere so they're actually going to be moving in with his mum with her mother-in-law whilst they

navigate this like new situation where he has to find a new job and they have to kind of adjust their expenses I tell this story because one of the things that she admitted was that they had got completely carried away with this aesthetic content creator lifestyle. So whilst all the things they were paying for were in proportion to their earnings, and she's not mentioned debt at all. Again, if she wanted to use debt, it's like her her choice she talked about like they just hadn't like everyone was asking do you not have an emergency savings like how can you not have emergency savings and it's as if people presume that there's just a big pile of cash they're waiting for everyone and the reality is most people don't have that the living paycheck to paycheck and

you know some people are out spending that paycheck and some people aren't. But one job loss and the family have to completely regroup. All that to say, we don't know what's going on in anyone's lives. And whilst we can make assumptions about lifestyles that people live, actually, we just don't know what's going on under the hood. And so for you, focusing on your journey, looking at your net worth and trying to grow your net worth is a super super good way of feeling financially well no matter what it looks like on the outside talking about net worth is also not for um rich old white men i think that's the image that comes to mind when you might hear the word net worth but no this is for all of us and i really want to normalize this language because when you're in the financial community we do talk about it regularly you know we go into the community and i'll share our net worth growth every month with

the community and and i love it when other people share them as well i think these absolute wins these jumps that you can make is absolutely amazing so it's not just for people that you lean heavily into financial language and have a lot of money. I think it's a real leveler amongst the community as well because the graph without figures just moves in the right direction so if I have a minus £10,000 net worth and I manage to pay off £500 in a month and I then have minus £9,500 the month after my graph's gone up so I have made progress and so I can feel like I've done well and that I'm moving in the right direction and someone next to me could have a million net worth and they might increase it by

£10,000 in a month but relatively we've still both had a nice graph going up in the same direction we've both made good decisions with our money that has made that outcome happen. Right so if net worth is assets minus liabilities let's have a think about the assets and the assets that matter. Now, assets, as I said, are the things that you own, but let's not get carried away because in today's world, we own a lot. You know, we could talk about the phone I have here with me. We could talk about my drinks cup. We could talk about the remote control JCB that my toddler has in the corner. We could talk about the play area in my garden. Yes, our assets are things that we own, but for financial reasons, we keep that super narrow.

So it's not just your stuff. We also took the decision in financial to narrow it further, to not include other assets that maybe other people do but in our opinion there are certain classes of assets that we want you to focus on to grow and they're the generic ones and so this is not for specialist asset management you know we're not talking here art we're not talking jewelry we're not talking handbags and actually we're also not talking cars and there's a whole lot of debate that's not for this podcast about what should and shouldn't be included. It's ours and we decided it because we decided that what was better for you guys was that you were not distracted by

other asset classes. Great if you have all your other shit together and then you're like, I might go invest in a Mez over here or a vintage Jag over there. Good for you. Majority of us aren't doing that. So that's why we keep it quite narrow. So first up, we have cash. Cash is king or queen. It is great for stability, cash. It is a comfort blanket. You can use it immediately to buy food. I just think that is something in our human nature to know that you can buy provisions with cash easily. You could buy a night in a hotel if you needed to as an emergency. You could put petrol in your car. There is something so comforting around cash. And when I mean cash, I don't necessarily mean like physical cash, but cash as an asset is essentially money held in bank accounts and savings accounts.

And maybe even like I said, a piggy bank or physical jar if you want to count those. But cash is the most comforting asset that we can own. The limiter with cash is historically low interest rates. And so even though we've had a nice little boom in the past couple of years, holding money in cash, it doesn't grow. And so tiny little explainer here on the realities of inflation and cash, but typically it has been hard to have cash growing in accounts at the same rate, if not more than inflation, it tends to be growing at an interest rate that's lower. And so in its absolute simplest terms, what this means is over time, your cash will go a little bit backwards. It's really hard to picture if you don't understand this concept, but inflation

is all around like the cost of goods and the rate at which they rise. And so when inflation's high, it means, kind of means, but I'm going to use this explanation for if you don't really understand it, that your living costs are going up. And so let's say your shopping basket cost 100 pounds today next year it might cost 105 pounds and if you had 100 pounds in a bank account but it only grew a little bit and you've now got 103 the problem is you can't buy that same basket you only have 103 but it now costs 105 so what we need to try and do is help make our money grow at the same rate at least that goods are going up so inflation's going up so that you just stay the same never mind get ahead so this is the downside of holding money in cash obviously but the other great reasons are

accessible you can use it to buy anything and look after yourself with it so cash is our first asset our second asset class is investments now we're going to be super generic here because we're talking about everything's technically an investment so what I'm meaning is investing in the market and typically this will be in stocks and shares so the majority of our pension portfolios will be made up of stocks and shares. In actual fact they are also invested in lots of different things like bonds or sometimes cash and lots of kind of different assets. So for simplified reasons, we're going to think of these as stocks and shares. Now, investments are higher risk, but they have a higher growth potential, the higher

risk because they can go up and down, whereas kind of like I said with cash, cash is cash. It doesn't really go down. It could go backwards if it doesn't grow. But with investments, they can go up and down. But with that higher risk does come that higher reward. So I think historically, the S&P has grown by something like 10% year on year, some good years, some bad years, and kind of evens it out. And so you can see that having assets that grow at more than the rate of inflation helps your actual asset pile and net growth grow. The last asset class as part of our net worth calculation that we're going to talk about today is property. So that's going to be the home that we own and also it could be rental properties as well. Now I've caveated the hell out of this right but I have to because there'll be so many people sat there going well that's not quite correct and you've missed off

this and you've missed off that and this is the problem with the way that people talk about investments. It is alienating people. It's making it too complicated. And so we are coming in at a really, really simple basic level. Because if we can get the majority of our listeners understanding that basic level, we can go into further details on deep dives and we can get more sophisticated. And you can learn the world if you want to but this podcast is meant to be leveling up the information so that everyone can have this base levels so that they can make

good decisions for their financial well-being so we'll come on to how you track it but these are the assets that matter and this is a really good time right to sit and think about the types of things you buy with your money i mean like how much of your budget is going to clothes how much is going to 10 pound cocktails how much is going to really expensive pilates classes that look like this. Hats off to anyone who can do any of those moves. I am hopeless. Can't even touch my toes. What about the skincare? What about the holidays?

All these things are important and you know I spend money on these things. So this is said with love. But none of those things are assets. None of those things are growing your net worth, which is fine. But I think that really helps you take a look at your budget and have a look at this perspective of where's my money going? And, you know, coming back to the financial budget, that's why we want things in your excess going to things that grow in value and if you don't have an excess if you have enough income you're weighting your

spending towards things like consumption I want it now and not things that grow later so just go have a look and go have a little think about how much of my money is going into cash going into investments and going into property. A big misconception about net worth tracking is that you have to have a big net worth to do it. That number, even if it's small, if it's moving in the right direction, it's so important to track. We're all on our own journeys and that's a wonderful thing actually because lots in the community, like people aren't necessarily sharing figures, they're just showing growth. That's a lovely thing because as I said earlier, it's a leveler. And I've actually got a great comment from the community that talks about watching that number move in the right direction no matter how slowly.

It gives you motivation and it gives you momentum. I am obsessed with financial. I'm obsessed with watching my debt go down and watching my net worth slowly change. I am still in so significant debt, but watching the numbers change has really helped. If you said that in the community, we're obsessed with you as well, thank you. And thank you for sharing how you feel

about seeing that number go up, even if it's slowly. As I said, I have got like three years of net worths. And when I look back over time time it's just so empowering and you feel so proud of you if you're doing it on your own you and your partner if you're doing it together it's a wonderful thing on that actually tracking with your partner we get asked this question a lot so I'll jump in and make a note that it's a wonderful thing to track together but you don't have to combine your net worths um so if you have fully combined finances fully combined everything especially if you're married combined finances, fully combined everything, especially

if you're married, why not track it together? Use one financial account and you add in everything. If you are tracking on your own, then you either have completely separate finances anyway and so it's pretty easy to do. But if you co-own any assets, then have a little think about the proportion of assets that you own. So if it is 50-50, then apply those 50-50. So you can track your own net worth. You can track it as a couple. You can track it both. You could see how we're together, but how am I doing?

Yeah, it's a common question we get. So I wanted to jump into that. But actually, before I tell you exactly how to track your net worth, one of my big goals for 2025 for us at Financial was to share community stories, real people telling their real experiences, sharing their real emotions. And I think we started that a little bit with The Vault last year, like your dilemmas come in thick and fast and we're able to share those. And I love it when you send us an email going, oh, that was me, that that was mine or you might have shared in the community afterwards so we're getting you in but I just want your voice and your story because I really feel like that can inspire someone else

it's it's great you know that you can hear it from me hear it from Holly hear it from Lucy and see quotes and stuff but when you listen to a real person telling you how they changed their life I just think it's the thing that you like you need to be spurred on and so I wanted to start off this week with Hannah she's achieved so much during her short time with financial and I know lots of you will love hearing about her journey so far and actually a quick point and we didn't talk about this in the chat but she had actually taken out financial premium and she cancelled and Holly actually reached out to her and said would you mind if we jump on a call like we're trying to learn like what would be helpful what wouldn't be and we gave her an extra month's trial because she just not used the trial she was like I'm just not ready I'm not in the right place like I've got

all this stuff going on I'm getting married and oh my god did she dive in she used that month I think she just blew us away with what she achieved and she said thank you so much for contacting me I'm so glad that I did do it so I'm going to take this opportunity if you have you have used your trial and you didn't use it properly and you want another go come to our inbox hello at financial.com i'm here for it i will give you another month i want you to have a go and do just what hannah did um because it's really inspirational so let's have a little listen to my chat this week with hannah hannah thank you so much for joining us for our very first guest on the vault unlocked thank you so much i'm really excited because the vault was the number one on my spotify wrapped last year so to be a guest on the vault is just brilliant I'm really looking forward to it

you were honestly there's so many of you but you were the obvious choice for our first one and so we're really super happy to have you as the first one so obviously we know each other quite well never met in person feel like I know you inside and out. And actually, I'd never met on camera until we caught up yesterday. But for those that don't know you, can you just share a little bit about you and about what life was like before you joined financial? Yeah, of course. So hello, my name is Hannah, basically. And I'm a massive extrovert, which is a blessing, but also a bit of a curse when it came to my finances before, because what it meant was like, I just wanted to say yes to absolutely everything, whether it was going out,

you know, buying something, a different event that was going on that maybe I wasn't even that keen on going to, but because I wanted to hang out with people and do stuff, I'd end up going anyway. And this was sort of multiple times a week, every single week. And I still like to do that now. It's just the difference is now that I'm not going into debt to pay for those things instead, because my salary was never going to cover those, that sort of lifestyle that I was upkeeping. You know, we're talking like multiple concerts, festivals, holidays, whenever anybody said, Oh, do you want to do this the answer was always yes um so yeah so that's kind of what my life was like a little bit before financial it still is

where I'm able to go out and see everybody but as I said just uh without the consequences afterwards well and and how long so you you wrote you said your salary it wasn't enough to cover the things that you wanted to do how long could life been that? How long had you kind of been, you know, probably using credit to kind of fund lifestyle? Yeah, so I actually got a credit card when I was 18, which seems to be the story for most people. And my parents, bless them, they did a really good job of kind of saying that we're not going to bail you out if you kind of want to pay for new clothes or holiday or anything, you have to to pay for it yourself which would have been great in their day when they weren't just handing out credit cards to 18 year olds willy-nilly so I wasn't saving up to be able to afford these things I was just popping them popping them on the card no problem and it was just something where I would

pay a little bit off the card and then rather than seeing it as debt at all because I just didn't see I didn't see myself as in debt which is crazy now looking back um but whenever I paid off a little bit off my card I'd see that as almost like a pay rise for the month or a bonus so say I paid 200 off I think oh I've got my salary and an extra 200 to spend and it's crazy because you look back and you think, but you paid off the 200 with your salary. What are you thinking? But that was my mindset at the time. And even though I didn't kind of buy anything huge, like a car on, you know, on credit or anything like that, it was just constant top ups, you know, 24, pretty much 24 seven. And it was only when I sat down after I cleared my debt a couple of about a month ago

that I realized that I'd actually racked up about 11 grand's worth of debt and just kept paying it off increment incrementally but then putting it straight back on again because I saw it as a pay rise rather than putting a hole in the debt which is mad so what changed why you've done this for so long what made you finally go like that's it now I want to actually get rid of this debt? Yeah, so the irony is, I mean, a lot of the things I was spending money on were things like money mindset courses, like this course is going to change your life. So I actually saw myself as quite a financially savvy person. And I would listen to episodes of The Vault and hear about people in debt and think, oh, you know, that's not great. Actually, that's a little bit similar to me. But you know, it's fine, because I'm going to just manifest all this money in or do this course, and I'm just going to be able to pay it back.

And that's when I started to take a little bit more notice. But then there was an episode, and I think it was one of the earlier ones where Holly said, you know, no one's coming to pay this debt off. That's, you know know who's going to come to rescue you and I remember being in the gym and I just kind of had this moment I remember being on one of the weights machines and just kind of stopping and having to sit there for a minute thinking shit what have I done and it all just came crashing down but I'm grateful that it happened because obviously you know it set the trajectory and I'm in a much, much better financial position now than I have ever been. I could just picture you like on the machine going, oh shit, I have to pay this off.

Yeah, people around me must have thought I was having some sort of existential crisis in the middle of the gym. And in a way I was, I guess. Yeah, you definitely were. So then you, so then during your, when you started financial then you went in you really did commit do you want to share a little bit about that bit then when you were like right I've come home from the gym saying to your partner we've got a plan like I'm going to be going crazy like what what was next yeah well I think that was the thing for him because I hadn't because I was in this mindset of you know I'm not a person in debt he actually hadn't realized that I had all these credit cards and you know Klana and things like that not because I was hiding it from him but because I think the right word is you know

it's a bit of a trend at the moment to be delusional I was too delusional way too delusional and it wasn't that I was hiding it from him it's just that I didn't identify as someone in debt until that point so as I mentioned earlier I'm just a massive extrovert and I hate to I hate FOMO I love to always be there enjoy myself and say yes to everything so I decided that I wanted to get things done as quickly as possible reduce the debt down ASAP and just went all in basically anything that was in my way was at risk of being sold so far at all, you know, absolutely everything. So obviously, each journey is unique to the person, but I just knew that I wanted to be able to say yes to everything as soon as possible. So I sold a load of my stuff, I went into the survive mode. So

was very, very particular about what I was saying yes to. And one of my best friends, I remember her saying to me, you know, like, are you struggling because you're not coming out and doing stuff as much? And I said to her, I was like, I'm actually in the best financial position of my life. It's just a very temporary moment. But yeah, so basically just going very all in for those six months meant that I could clear my debt super quick. And now I'm back to being able to say yes to things. In that time as well, I have sinking funds. So we've got holidays now that we can go on that I don't have to start saving from now. And I think as well, like being able to have those sinking funds,

we haven't gone completely without during that time in the survive mode we've still been able to do stuff it's just been a little bit less than what I'd normally be doing because actually a lot of um a lot of extroverts will be sat here wanting to start the journey you've gone on but will have been the same predicament which is but I love being out about I love being with people and I feel like you're complete evidence that even if you can go hard as long as you plan you can still do things yeah absolutely it makes me laugh because on the podcast obviously it seems that Lucy loves to stay in because and you guys like oh and you know love that that sounds great and I'm thinking god like I want to be out all the time but it just shows you that you really can like the method works for whether you want to go out all the time

whether you you know want to stay in all the time it just it just works and it's really flexible yeah no it's it definitely is and we're all we're all different I would say in the pod like I'm grateful for my social circle of friends because they drag me out and then I absolutely love it I'm just like there's this I think TikTok told me I'm an extrovert introvert or introvert extrovert which other way around so it is for everyone now I remember I think TikTok told me I'm an extrovert, introvert or introvert, extrovert, whichever way you want. So it is for everyone. Now, I remember, I think it was over Christmas. Suddenly you said like, fuck it, I'm using my savings and you cleared your debt. Like that, a lot of people, we get so many DMs.

In fact, we get that many dilemmas where we double up and we don't always answer them because we've answered them before. But so many people say, should I use savings to pay off debt? So what do you think to that question? Yeah, 100%. I mean, I think, again, it varies on the person because I actually use my house deposit savings to pay off the debt. And I know a lot of people think, what are you crazy? Like the prices of houses are just going up and up and up. But I kind of had a bit of a sit down with myself and realise that actually, even though I do want to own a home eventually, it's not something I want to do right now. You know, my husband and I were really looking forward to doing a bit of traveling and living a bit of an almost nomadic lifestyle in different countries. So having a house as well just wasn't congruent to that right now. So I just thought this money's

just sat in an account. I was doing my 2025 goals. And my main goal was to become debt free in 2025, even though I was close, but it would still be my main goal. And I just thought to myself, I can just do that now. Like I can just take the money out of the Lifetime ISA and just do it now, pay it off, and then go into 2025, having already achieved the biggest goal. And yeah, and that was it and so i did that the money came through it takes a few days for it to come through from uh from the provider and i paid it off and i know that you guys always say oh i wish someone would film paying off the debt because after you press the button you just sat there thinking oh my god that's it that's crazy

and i even now we're kind of a couple of months down the line now. I always think, oh, is there one that I've forgotten? Every single payday. And it's just so nice to kind of go through my account and think, no, I literally owe nobody else anything at all. And my whole paycheck's mine to do what I want with, which is great. And a big thing you did this year was you moved jobs, didn't you? And not for a pay rise. Lots of people kind of move for a pay rise, but you felt able to do that. Yeah, exactly. So I was in a position a little bit earlier this year where I just was not happy at work. And being able to actually budget meant that I could take a slight pay dip for a job that makes me much, much happier in my work. So that was

such an unexpected, such an unexpected positive point to budgeting and using the financial method, you'd never think that you'd be going into a situation where technically you're bringing in less money. But because the debt was being taken care of, I was still about 500 pounds a month better off than when I was in a higher paying role. And I just think there's so much more to, you know, getting a grip on your finances and your debt than just kind of having more money and making more money because you can make those choices, those really holistic choices, you know, to do with like quality of life and your lifestyle that seems strange to people to take a pay cut but we were able to do it

because um everything was in order no it's amazing and it is the goal and I think people um you just feel different and you walk different and you act more different I said like you're checking your bank accounts and there's there's no debt it's it's so freeing and and so you I mean you had such a year you got married you you got these different plans in place, you paid off all your debt, you are in a better job where you feel better. What is next for you and for your husband? What on earth are you going to do using the financial method next? I know, yeah, we just, we get bored so easily, clearly, like we're moving house, getting new jobs, getting married all within the space of a year. So we just get bored really, really easily.

So I think for us, we, as I said, we really want to do a little bit of traveling. So towards the end of the year, we are going to be doing the digital nomad thing. We've already got our float ready to go for kind of like doing Airbnbs and just basically see where the world takes us. And it's so nice to be able to do that without thinking in the back of my head oh but you know if the money stops coming in I've got to get myself home and pay things off because it's all taken care of it's just to make sure that we're safe and we can get back if we want to but also I'm really enjoying learning about investing at the moment so I'm reading Girls That Invest by Simran Kaur amazing I love the book I love the podcast

I love her she's great um so yeah so looking forward to making my money grow as well in the future too and it's so good to be able to do that and then also do the fun stuff at the same time too it's you know financial wellness doesn't mean that you have to miss out on other things no definitely not and I think that you're the exciting thing about where you're at and this is this is the point of the excess the bigger the excess is the bigger the choice to do jobs or live in countries or housing situations that you enjoy and you like said for for girls that invest like we we help people create excess cash so that they can do that and do that in a balanced way where they're doing that and kind of automating it and it building up a portfolio but also you've got your phone sinking funds you've got your travel sinking

funds so that it's like the that you it's like I feel like it's like doing a jigsaw and you get your corner pieces sorted first and then kind of build color to what you want to do and that's what you're going to be able to do and I definitely feel like we need a January 2026 check-in with you to be like okay what did you do what have you done because knowing you you will like have smashed it and sprinted through the next seven goals as well and so would you come back and share that with us absolutely I would love to come back and yeah just love to come back I'll keep listening to the vault in the meantime and just excited to put more things into practice really well listen like I said I knew you'd be a great first

guest to share your story because people will be inspired by what you're doing whether it's like I finally want to pay off that debt or I oh I can do it and I can still have fun and have a life or whether it's like I hate my job too and I am being inspired and I'm going to write that like letter of resignation whatever it is I think hearing from other people really helps and you were the perfect person to share it so Hannah thank you so much thank you for having me I'll see you next time I'm invited on oh my god wasn't that amazing I just I'm I'm smiling so much I'm beaming my cheeks are hurting we've got a lot of community members that we're going to be hearing from every week and obviously if you think that you've got something that you want to share and you want to

jump on a call like I would love to do a FaceTime call with you for those of you that aren't watching on YouTube it was like a FaceTime call that we recorded so it's dead chill super super chill and and really intimate and normal so if you want to jump on a call with me I would love to hear about your journey as well feel free again to email the vault at fanachel.com and message us and we'll see about having a little chat okay back on net worth we had our theory early on we had a little chat with hannah and now we are going to dive into how to track your net worth so firstly and remember remember um there is that and remember there is an area in the app where you can track your net worth it is a premium feature

um so again if you want to trial that then and you can track your net worth. It is a premium feature. So again, if you want to trial that and you've used your trial, like I said, come to us. But you can do this in a spreadsheet and a piece of paper. You don't need to use the app if you wanted to do it on your own little journal or whatever. Do it. We're first off going to identify the assets that fit the financial method tracker. You have to list out all the things that you have in these asset classes and we've talked about them things like cash, investments, property. I'm going to walk through some examples of assets that we use to kind of help bring it to life for you. So firstly let's think about cash. We track our emergency fund in there so wherever our emergency funds are

and again we do split those across different platforms to optimize the returns that we're getting at the moment I'm using trading 212 and so is my husband we've just had a starling fix that's come to an end a few things hanging around so we're due an audit of all those to make sure that we're maximizing our returns and so we will list multiple little accounts so it'll say like Laura, Starling, Carl trading 212 so cash anywhere you hold cash. Now we don't include sinking funds in tracking net worth I think it's optional if you want to but it's spending money in my head even though it's money that you could get access to if you needed it it's got a job it's already planned so it's like

I wouldn't want it as part of my net worth because my net worth is what's ring fenced for just assets that kind of grow and that's to be spent so even though I want it to be making money and um I talked about that on the vault on Thursday actually that came out about not being happy about my pots and and the money they're making I don't include that I also don't include any money in the current account but again that's because it's part of the budget it's to be spent. We also don't include junior ISAs so we have three junior ISAs for our children but they're not ours they're in their name. Then it comes on to things like investments so we would put our pension cash value in there you might have multiple pensions for multiple jobs we've consolidated some of those we've got some of those in one account and then

we've got our work pensions and then we've got our stocks and shares ISAs. So all those would be listed under investments. And then lastly, there's property. So we own two properties. We own our home and we own a rental property. And so what you do is you take the market value of those properties, ignore mortgage for a minute, we'll talk about that, but you pick a typical market value. Now this is just an arbitrary figure there's no point in making it over the top because you're just lying to yourself like it's not going anywhere else it's just staying within you and your calculations so picking an appropriate value for your property that's not under egging it and not over egging

it but kind of okay and what I tend to do is keep that for the full year and once a year we'll revisit it and look at whether you know prices have gone up or prices have gone down and adjust it accordingly but typically we'll take one value and use it for the year. So we'll list all those out and it's probably worth a little reflection about how you feel about those assets like do you wish you had more? I mean that's an obvious question but are actually you realizing you've more assets than you thought so many people don't think about their pensions obviously because you can't get access to them so early and they don't think about different savings accounts that might be dotted around and suddenly when you add them all up especially if you're

doing it combined with a partner actually you might be doing pretty well and you should be quite proud of yourself next we're going to jump into listing our liabilities, which is the long fancy word for your debts. This could be credit cards, loans, car finance, buy now, pay later, overdraft, loans to family and friends. Get all those listed. Again, you can do this in the tracker in the app, but you might have them listed on the debt tracker. That might be a reference point for you to start, but list out all your debts. Now, this includes your mortgage. So if you have properties, this is where you list the outstanding mortgage amount. Remember you do the full value of the home on the assets and then you have the full value of the debt on the homes or the properties on your liabilities. You then take both those numbers and you subtract the liabilities or the

debt number from the asset number. This will give you your net worth. Now warning, this might be a negative and do not be worried if it's a negative. It is a starting point. So many people start off, especially if they're younger, with a negative net worth. What does this mean? It means you owe more than you own. And that's okay because we're on a journey and we're going to be building up savings and we're going to be paying off debt and we're going to be buying homes and we're going to be investing. So don't be worried if it's a negative so many people start off with this number negative and the first goal is is exciting it's to get to zero it's is to get to like break even where you don't owe more than you owe and so now you have your

net worth you can track this pick the same day typically every month i like to pick around the third fourth of the month at the third if i can can remember is in the diary and what this means is things like our mortgage has been paid and investments money have been transferred and since payday was like the week before it's had a week to settle and it is quite important to keep the same time every month if it's not the end of the world if you don't but if it's this you want to see consistent growth and so you want to know that you're measuring the same things that the same payments have been made and debt's been paid off a similar time so try and pick the day that's right for you like i said i like about the third or fourth of the month and that my friends is it it's not absolute rocket science it might be hard the first time you do it

but this is tracking your net worth and one in the app especially and and to be fair, even on paper and everything else, once you've done it once, you just copy it and update it and tweak it. And so some things stay the same. So things like the property value might stay the same. But it really doesn't take that long, especially if you can kind of get the app up on your phone and you can log into your online banking or do it from your phone and you just switch from app to app. My husband and i honestly we could do our net worth in about four minutes he does all the logging into all the different accounts on his uh in his name and i shout for them i say right what about this one what about this one and we just nudge it and then um i will do mine on my phone which again you just switch

from app to app and you you get that amount and you you update it and then you just click save and then suddenly you've got a new you know line on your graph that you can look amount and you update it and then you just click save and then suddenly you've got a new you know line on your graph that you can look at and a couple of things I found useful about tracking my net worth is one when I felt financial poor which is when you have moved your money to savings and moved your money to your pensions and moved your money to your sinking funds and your pots and when you've overpaid your debt and you feel like you've not got a lot of money because that's financial poor this is a real thing the net worth tracker can really bring you joy because what you realize is I actually have shit I have stuff I have assets I am moving in the right direction. So even if all this over here in my current form, in my current account, in my bank, even if I feel stressed, if I still see my debt quite high, I look at my net worth happy so that's one thing the second thing is and I'm I

guess I'm speaking from a position of you know 15 years on on a money journey been doing financial for a decade there are times when our net worth has jumped like five figures in a month and I'm not saying that to flex I'm not saying that to show off because sometimes it's gone down by the same but what starts to happen is this growth compounds and we'll talk about investing next week but especially with investments and you know to be fair with property increases as well so that will happen if you kind of reassess the value of your home once a year and we've got a rental property as well so we're benefiting from two capital jumps sometimes it can jump so much and you kind of have to double check it and you have to double check the investments if the stock market's had a really good month and

you know whatever it is you just look and you go wow you know you could have had a bonus from work um you could whatever it is there'll be some months where it might take your breath away and that's really important to get those ones those are the months where it might take your breath away and that's really important to get those ones those are the ones where it goes down and but I think if you because you always get the ups the downs you go ah okay but even like we had a really busy December where we'd like you know it was my husband's 40th and so there was a present and there was a party and so um savings were depleted for some of that and we had really big stuff like my car needed quite a bit of work and so we had to do that as well and i think there

was something else but basically life hit us okay and we were fine because we planned for it and i did our net worth in january and i was expecting it to go down. It didn't. It went up. Even though we had depleted savings for these different things, it went up. It didn't go up by a lot, but that is what happens because whilst we were paying for kind of,

we needed to go into emergency fund for my car. There wasn't enough in the car fund because we just had the service and the MOT. But we had to go into the emergency fund for my car there wasn't enough in the car fund because we just had the service and the mot um but we had to go into the emergency room for that we did go into our um non-emergency but cash savings for um birthday because we didn't know what we were going to do and and stuff and so we we didn't sinking fund enough for that what had happened was we'd obviously still pay down our mortgage we had interest on savings grow. We had investments go up and we had investment contributions. So all this stuff that's happening in the background,

you then like do the figures, you do the calculation and you still see it go up. That is the outcome of these like little inputs, these little habits, these automations, these moving your savings, these creating an excess. It all builds momentum. And that was the outcome. Ultimately, these moving your savings, these creating an excess, it all builds momentum and that was the outcome. Ultimately this is about progress not perfection and the mere tracking of it is going to really help you connect with that long-term vision of our money like I said rather

than just staying in the here and now and not really feeling like you're financially well for the future. You can actually sometimes go backwards as well depending on the accounts that you have access to that you might be able to pinpoint months previously and build up a picture of how it's been going if you haven't been tracking it. Ultimately your net worth is a reflection of your financial well-being and the bigger it is especially relative to the expenses you have and the lifestyle you have the better you're going to feel and remember this is all about how you feel so hopefully we have helped to normalize the concept of a net worth that it's not just for white old rich men it's for all of us and I want you to build your wealth and I want you to grow and as I said at the

beginning the point is to get you to grow it's not to hang around and survive and build forever and so you have to start pushing yourself out your comfort zone and talking about these things and I want you to have more wealth. I especially want women to have more wealth. And the way we do that is we grow our net worth through growing assets. Okay, that's it for this week's The Vault Unlocked. If you have any topics that you would love us to look at covering, then please email thevault at financial.com. And just a disclaimer, this is a lighthearted chat around life and money.

We are not giving financial advice. Bye-bye.