By Penny Counts
As a banker and finance professional, I have met thousands of people and spent considerable time talking about their finances. What I’ve gathered is that saving is a virtue deeply ingrained in our psyche. However, I am yet to meet someone who can give a clear answer to the question: What are you saving for? I mean the end goal.
I’ve received myriad answers—from owning a house, funding a child’s education, and buying a car, to saving for rainy days and retirement.
The main objective of saving is not just any one of these—it is a composite of all of them. And when we achieve that composite scenario, it is called financial freedom. Yet, very few have a clear target or a vision of that composite goal to plan for.
Why we save—or rather, why we need to save—is clear and doesn’t need much explanation. But how much should we save, and how should we go about it? That’s where people get stuck.
Sometimes, in the rush of daily life, we lack the mental bandwidth to think about these matters. Other times, we simply lack the skill to approach them thoughtfully.
I’m not nudging you to approach a financial professional, but taking help doesn’t harm.
The Role of Mind
The human psyche is often hardwired in financial matters.With our mental software shaped by family history, we tend to behave based on what we already know—or what we’ve seen our parents do. If our parents struggled financially or were conservative with money, we often carry forward that mindset. This can lead to one of two paths:
- Either we become rebellious and take a drastically different approach to money,
- Or we double down on safe investments and strict savings—or worse, we overspend as a reaction against our financial past.
You remember Srinivas, from our earlier blog? He had a difficult family history and was determined to become rich and own every possible luxury in life. That led him straight into a debt trap. He knew what he wanted, but lacked the mental makeup and skill to plan for it.
On the other hand, there are those who are averse to taking any risks and make only “safe” choices—because they, too, were trained that way by their family backgrounds.
These reactions, born from our internal models, often lead to suboptimal choices. To break free, we must retrain our minds to understand financial concepts we may never have encountered before.
The question is: How do I train my mind?
Training the mind for a desired financial outcome is difficult. It requires focus. It also demands that we shed the baggage of our past.
What should we focus on?
- Saving to overcome difficulties?
- Acquiring assets and luxuries?
- Preserving what you have?
- Building a legacy?
For many, these goals are intertwined. But we must dissect them and gain clarity. What do we truly want from our life savings?
Net Worth is the Right Metric
When we understand the human mindset, we find financial aspirations ranging from comfortable living, to aspirational lifestyles, to legacy-building.
In this age of information overload, awareness about savings and investments is high. The financialization of household savings has helped improve access to various avenues—PPF, FDs, Post Office schemes, mutual funds, equities, real estate, and more.
But that still isn’t enough—if you don’t have a quantifiable target. And what should that target be? It depends entirely on what you intend to achieve—which is a separate conversation in itself.
However, your target shouldn’t be vague like “I want to have savings.”
It should be “I want to have a Net Worth.”
Net worth is simply your assets minus liabilities.
Assign a number to it.
Make it a quantifiable goal.
And most importantly, TRACK IT.
How do I do that?
The Net Worth Tracker
Tracking your net worth is important. As we all know, if we have a target but don’t regularly track our progress, its meaning will be lost over time—and there’s a significant chance we won’t achieve it because we lose sight of the goal.
So, how do you track your progress?
By using a simple manual tracker, which I’ll share here. It will help you stay on course and allow for necessary course corrections to achieve your stated goal. You need to realign your assets based on expected returns and manage liabilities to improve the overall return at the portfolio level.
The format for tracking your net worth is quite simple and self-explanatory.
You list your assets, investments, and savings on one side of a table, and your liabilities on the other. The net difference between the total of both columns gives you your Net Worth.
You can use interactive tools in Excel, Google Sheets, or various online platforms to monitor progress.
But the bottom line is—your commitment.
Here's a table to help you get started: Net Worth Tracker
I invite you to use this table to your advantage. Track your net worth quarterly, half-yearly, or annually—whatever frequency suits you.
The more time you spend with it, the more fascinated you’ll become—and the more committed you’ll feel toward your targeted goal.
So, how do you go about achieving that target Net Worth?
There are various ways to self-learn and discover a portfolio mix that suits you. It depends on your risk profile, psychological makeup, financial background, and your comfort with financial instruments.
This also touches on behavioral science, which I’ll discuss in a future blog. For now, let’s stay focused.
Visualization and Execution
Once you embrace this table and commit to your Net Worth target, you’ll start seeing it grow. And if it doesn’t, you’ll do everything possible to make it grow.
That is the magic of visualization. The magic of having a clear goal. The magic of putting that goal on paper in a structured format.
I urge young professionals, and even those nearing retirement, to fill out this table and understand where they stand.
Once you know your current position, you can prepare a clear path forward by building knowledge. In today’s digital age, knowledge is abundant.
You can go the DIY route, or seek help from entities like Penny Counts, wealth managers, financial planners, or investment advisors.
But remember—informed decisions are better decisions.
Because ultimately, it’s your money, your life, and you must dictate the terms of your future.
Need help getting started? Download our Net Worth Tracker Excel template and take control of your financial future today.
(This blog has been inspired by insights from books like Secrets of the Millionaire Mind by T. Harv Eker and others focused on wealth psychology and behaviour.)
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