Can someone also explain to me how when I calculate my net worth do I work in my house? Do I subtract the annual city estimate from what is owing on my mortgage to get that number?
House value goes under assets. Your mortgage goes under liabilities. Every time you make a mortgage payment subtract the portion of your payment that goes towards principle from your mortgage value.
House value = $400,000
Monthly payment = $1000 ( $400 is interest, $600 is principal)
Outstanding mortgage: $200,000 - $600= $199,400
Net worth: $400,000 - $199,400 = $200,600
The only thing up for debate is whether you should track the changes in the value of your home. Opinions vary. For me I don't think its worth the time. I have the value set to what I paid for my condo and I deal with what happens when I go to sell it.