How to be distracted from negative Net Worth thoughts?

[deek]

Hi guys! Too often, I find myself thinking about my net worth and how it hasn't reached 0 yet. I'm only 28. I know it's not healthy, and I am generally a pretty worry-free person. I am confident in my savings goals and my long-term strategy. But it just doesn't go away. What are some things you all use to focus on the positive and block all the negative out?

[RyanAtTanagra]

I don't focus on my net worth, because I don't have direct control over it.  I focus on savings rate and annual spending, because those I do have direct control over, and improving those tends to also improve my net worth.  So, stop focusing on your net worth and start focusing on things you can change.

[Boofinator]

Too many people focus on net worth (positive, negative, zero, imaginary, whatever). Net worth should in no way be tied to self worth.

Presumably, you have a goal to be in some way financially secure and perhaps independent (since that's the primary focus of this site). Now, as Ryan said, what steps can you do, now that you have come to desire achieving this goal?

Just like someone who's physically weak and decides to get strong can make extremely meaningful strides in a short period of time relative to someone who is already a body builder, someone who's poor can make giant strides compared to someone who is already rich. Don't let the dollars and cents of net worth fool you: eliminating $1000 of debt when struggling financially is much more powerful than gaining an extra $10k due to capital gains appreciation when one is already FI.

[deek]

Too many people focus on net worth (positive, negative, zero, imaginary, whatever). Net worth should in no way be tied to self worth.

Presumably, you have a goal to be in some way financially secure and perhaps independent (since that's the primary focus of this site). Now, as Ryan said, what steps can you do, now that you have come to desire achieving this goal?

Just like someone who's physically weak and decides to get strong can make extremely meaningful strides in a short period of time relative to someone who is already a body builder, someone who's poor can make giant strides compared to someone who is already rich. Don't let the dollars and cents of net worth fool you: eliminating $1000 of debt when struggling financially is much more powerful than gaining an extra $10k due to capital gains appreciation when one is already FI.

Makes a lot of sense. It's just a mindset thing, I think the biggest thing is that I'm just working on the patience aspect.

[Master of None]

I don't focus on my net worth, because I don't have direct control over it.  I focus on savings rate and annual spending, because those I do have direct control over, and improving those tends to also improve my net worth.  So, stop focusing on your net worth and start focusing on things you can change.

Can you explain how you don't have direct control over your net worth? It might be staring me in the face but I can't think of how one could not be in control of their net worth outside of major medical issues and such.

[RyanAtTanagra]

I don't focus on my net worth, because I don't have direct control over it.  I focus on savings rate and annual spending, because those I do have direct control over, and improving those tends to also improve my net worth.  So, stop focusing on your net worth and start focusing on things you can change.

Can you explain how you don't have direct control over your net worth? It might be staring me in the face but I can't think of how one could not be in control of their net worth outside of major medical issues and such.

Because it's effected by the markets and can vary due to many variables.  You have control over it in the sense that if you increase your savings rate (either via reduced spending or increased income), then your net worth usually/eventually increases (depending on the market at the time).    But the net worth increase is a byproduct of something else you're more directly effecting, so just focus on those things.

Think about it in the sense of if you have enough savings, the market fluctuations make your NW go up and down more than your savings does, so focusing on net worth is almost pointless. But I can still very much control my spending, and thus how much savings I'm putting into the market.  So on my spreadsheets, while I have a NW value and look at it, I'm much more interested in the projected EOY spending and savings, and the savings rate as a percentage.

Edit to add: another way of thinking of it is, net worth is a good metric to track, it's like a score, but there aren't a lot of action items to take away from it.  But looking at spending and savings numbers, you can come up with specific action items to effect those.  So as such, I view them as more important when you're at the stage of trying to make changes and not on autopilot yet (which for me, I'm 15 years in and still haven't given up optimizing) .

[socaso]

One thing that really helped me was putting a once a month financial checkup in my planner. I knew I was going to keep checking but setting it at once a month is useful so I don't check it all the time and it's enough time between checkups that I can actually see progress.

[MrThatsDifferent]

You’re going to feel amazing once you hit 0, but even before then, celebrate milestones in the reduction of your debt, which isn’t easy. The other great thing is you’re building so many good habits, and gaining so much knowledge that when it does go positive, you’ll accelerate. Think of this akin to doing all the workouts necessary to compete in a major race. It will not be for nothing. Eyes on the prize, be proud of your accomplishments and never stop learning.

[Dicey]

Okay, here's the laughably low-tech solution that worked for me: Post-It Notes.

I had a set of large-ish, lined, brightly colored Post-It Notes. They were left over from some convention or other. (Mustachian tip: Be the person who procures/sets up/breaks down things and often the leftovers are yours for the effort. Plus your boss becomes dependent on you, which doesn't hurt. Another trick to subtly become indispensable.)

Each month, I'd fill in the totals of all my accounts, then I'd add them up. I posted it on the wall of my home office. Yep, right on the wall where I couldn't miss it. Every day, I'd see that stack of brightly colored notes on the wall, silently reminding me of my goals. Keep the spending low and the savings high. The following month, when I did it again, I would always see progress. Even if it was small, it was a tiny drip, drip, drip reminder.  At the end of the year, I would transfer the figures to a spreadsheet and start a new sticky on the wall. I did this for years and years. Why? Because it worked.

Fun future fact: I met a guy when he painted my house. Many years later, he became my husband (Surprise! Life is crazy.). One day he remarked that he had noticed my Post-It system when we first met and been impressed as hell. Who'da thunk?

@deek, I never had to climb out of a mountain of debt, but I was always a single, not-high wage earner in a HCOLA. Baby steps will absolutely get you there. The trick is to keep taking them and trust that they absolutely will make a difference. This shit really works.

[Lady SA]

In the beginning, it felt great to finally be doing something to improve our situation and get our crap in order (setting up budgets, lowering expenses, accounts set up, auto-debits, etc), there was this amazing sense of acceleration/progress, but at some point all the tangible "things to do" are completed. And then all you are left to do is let your plan execute in the background and periodically check in and watch the numbers improve. Adjusting after the flurry of activity/progress ends and settling into this new calm era is not smooth (in my experience) and requires patience for sure.

I constantly thought about our net worth. Every day, I was checking Mint, not to do anything but just to look at the numbers and fret (not super healthy...). It took almost 3 years to hit $0, and it was agonizing lol
Honestly, once our net worth was positive, the anxiety definitely decreased and I was no longer checking every day. Now it was more fun -- the numbers were now in our favor and accelerating quickly in the right direction.

From the beginning, I did log our assets and debts and net worth once per month in a spreadsheet. I was just needlessly checking much more often than that even when there wasnt' anything I could do and fretting. I continue to log our monthly numbers in this same spreadsheet. I liked having a spreadsheet because it did massively help (even in the anxious first 3 years) because I could look back just a few months ago and see how far we had come. It's really easy to get bogged down in the current numbers because they still aren't where you want, but if you can also hold in your mind the rate of improvement, it does give you a sense of optimism rather than vague disappointment.

[Metalcat]

The whole NW thing is a marathon, not a sprint.

As someone who had a NW in the negative hundreds of thousands for almost my entire 30s, it just is what it is.

I focused on building my best life, learning to be happy today, and crafting a spending style that I could passively trust to take care of the debt for me, while generating a sustainable and enjoyable lifestyle.

If this is plaguing you, I would take it as a warning sign that something in life is a little off. Don't focus on your debt, focus on your life and why you aren't enjoying this part of the process.

If you fixate too much on the future when you will be debt free, then you lose out on this time. You devalue the present, and that's just toxic.

If your financial habits are healthy, the debt will just disappear eventually. That's inevitable. It's a non issue.

What you do with the time between now and then though is critical.

[RedmondStash]

My suggestion is to set small goals, as often as you need to feel you're accomplishing something. Put blinders on for the bigger overall net-worth goals, because those are just frustrating distractions right now.

Did you save $x this month? Achievement unlocked!

Did you bring lunch to work every day (or almost every day)? Mission accomplished!

Did you stare longingly at the new car/clothes/latte/flat-screen TV and then walk away? Goal achieved!

Did you stay within your $x budget of extra/play money this month? Way to go!

It's hard to be patient in your 20s. So shift your focus to something that doesn't require patience. Set your lifestyle right, live well within your means, pay down debt like crazy and then save like crazy, and you won't have to worry later on.

The whole process is a marathon, but you can set little sprints inside it if you need to boost your sense of accomplishment and contentment.

Or -- think about a non-financial goal you can set small goals for: a promotion at work, a fitness goal, classes you can take to improve your skills and/or hobbies, learning to bake a perfect scone -- whatever helps you focus on something short-term that you can feel good about.

Good luck. This stuff is not easy; that's why the vast majority of people never even try it. You're already ahead of the game because you're engaging with this process.

[obstinate]

Just remember that your net worth doesn't count your human capital. Your person and the knowledge contained in it is worth at least a million or two! So you're definitely positive net worth, even if your paper net worth isn't that high.

[Master of None]

I don't focus on my net worth, because I don't have direct control over it.  I focus on savings rate and annual spending, because those I do have direct control over, and improving those tends to also improve my net worth.  So, stop focusing on your net worth and start focusing on things you can change.

Can you explain how you don't have direct control over your net worth? It might be staring me in the face but I can't think of how one could not be in control of their net worth outside of major medical issues and such.

Because it's effected by the markets and can vary due to many variables.  You have control over it in the sense that if you increase your savings rate (either via reduced spending or increased income), then your net worth usually/eventually increases (depending on the market at the time).    But the net worth increase is a byproduct of something else you're more directly effecting, so just focus on those things.

Think about it in the sense of if you have enough savings, the market fluctuations make your NW go up and down more than your savings does, so focusing on net worth is almost pointless. But I can still very much control my spending, and thus how much savings I'm putting into the market.  So on my spreadsheets, while I have a NW value and look at it, I'm much more interested in the projected EOY spending and savings, and the savings rate as a percentage.

Edit to add: another way of thinking of it is, net worth is a good metric to track, it's like a score, but there aren't a lot of action items to take away from it.  But looking at spending and savings numbers, you can come up with specific action items to effect those.  So as such, I view them as more important when you're at the stage of trying to make changes and not on autopilot yet (which for me, I'm 15 years in and still haven't given up optimizing) .

Thanks! That makes total sense. Sometimes my brain doesn't feel like connecting dots. I like your perspective.