What Is Liquid Net Worth: How To Calculate It And The Best Tools


Jeremy BiberdorfBy: Jeremy Biberdorf

February 11, 2024February 11, 2024

Getting a handle on your net worth is like taking a snapshot of your financial well-being. It’s not just about adding up everything you own; it’s about understanding where you stand today so you can make smart choices for tomorrow. Liquid net worth, specifically, shines a spotlight on how prepared you are to manage unexpected bills or achieve your dreams without derailing your budget.

Have you ever heard of being “house poor”? It’s when the cost of your home eats up so much of your budget that you’re left scrambling to cover other expenses. Or, consider those with hefty paychecks who still live paycheck to paycheck, struggling to set aside savings. These situations highlight the pitfalls of not having enough liquid assets—ready cash—to navigate daily life or save for the future.

Improving your liquid net worth is key to breaking free from financial stress. It empowers you to weather life’s storms and save for the moments that matter, from vacations and home improvements to a comfortable retirement.

In this guide, we explore the best tools to track your net worth. We’ve got the insights to help you make informed decisions and steer your finances toward your goals.

What is Liquid Net Worth?

Liquid net worth is basically how much cash you’d have on hand if you settled all your debts today. It’s similar to your total net worth, but it only counts the money you can quickly turn into cash. So, it doesn’t include stuff like your home or retirement fund. It’s a handy way to see how much ready money you’ve got for emergencies or opportunities, minus what you owe.

How to Calculate Liquid Net Worth

The formula to calculate liquid net worth is quite simple, simply add up your assets that can easily and quickly be converted into cash, and subtract your liabilities. You can do this yourself, if you have a bit of patience and know-how. If you want to save time, you can consider using tools to help you calculate your liquid net worth.

Tools To Calculate Liquid Net Worth

Luckily there are many FinTech solutions to calculate liquid net worth as well as plenty of other quality useful features. Here are some of the top liquid net worth tools you can consider:

Quicken

Quicken Logo

Quicken is a veteran financial management tool that’s been around since 1983, helping folks get a grip on their money matters. Originally cooked up by Intuit Inc., Quicken became its own thing after H.I.G. Capital snapped it up in 2016. It’s pretty much the Swiss Army knife for personal finance, known for its easy-to-use features that cover everything from budgeting to tracking investments.

Quicken shines when it comes to showing you what you’re really worth, cash-wise. It tallies up your ready cash and investments, then subtracts any debts to show your liquid net worth – that’s the money you can quickly lay your hands on.

Other Features include:

  • Budgeting: Set and track your spending limits to stay on financial track.
  • Investment Insights: Keep an eye on your portfolio’s performance and how it stacks against the market.
  • Bill Management: Never miss a payment with reminders and direct pay options.
  • Debt Plan: Quicken helps plot the quickest escape route from debt.
  • Tax Prep: Organize tax-related expenses to make tax season less taxing.

Learn More About Quicken

Monarch Money

Monarch Money Logo

Monarch Money is transforming the way we handle our finances, making everything from tracking investments to setting up a budget simpler and more intuitive. Created by Val Agostino, this platform is a one-stop-shop for getting a grip on your financial world. It links up with thousands of banks and financial institutions, so you get a bird’s-eye view of everything from your daily spending to your long-term savings.

Besides a quality liquid net worth tracker, here’s what makes Monarch Money stand out:

  • All Your Accounts in One Place: Imagine having all your financial information—checking accounts, savings, credit cards, investments—all neatly displayed in one dashboard. That’s what Monarch Money does. It’s like having a financial dashboard that gives you the total picture at a glance.
  • Manage Money Together: For couples or financial partners, Monarch Money has a neat trick up its sleeve. You can manage your finances together, making it easier to hit those shared goals and dreams, all while keeping things transparent.
  • Keep Tabs on Your Investments: Whether you’re a seasoned investor or just starting out, Monarch Money lets you monitor how your investments are doing, how they’re spread out, and how they’re growing over time.
  • Set and Smash Your Financial Goals: Want to save for a new car? Pay down debt? Monarch Money not only lets you set these goals but also tracks your progress and keeps you motivated along the way.
  • Budgeting Made Easy: The platform’s budgeting tools are a game changer. You can customize how you categorize your spending, get alerts to keep you in check, and dive deep into your spending habits with insightful reports and visuals.

Learn More About Monarch Money

Final Thoughts

Understanding your liquid net worth is crucial for ensuring financial stability and preparing for both expected and unexpected life events. It provides a clear picture of your available cash resources after settling all debts, setting the foundation for sound financial planning and decision-making. Tools like Monarch Money and Quicken have revolutionized financial management, offering comprehensive and intuitive platforms to monitor investments, budget effectively, and calculate your liquid net worth with ease.

By leveraging these tools, you can gain greater control over your finances, ensuring you’re well-prepared for any financial challenge or opportunity that comes your way. For a complete list, check out this best net worth tracker article.

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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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