A Penny Saved

JLP’s Question of the day brings up a bit of a hot topic.  Should the value of your home be included in your net worth calculations?

I say yes.  Just so long as you count the debt on the house as well.  Mortgage, Home Equity Line of Credit, etc… should all be included and most people are very adamant about including all debt.  If the debt is included, then so should the value of the house.

One thing to remember when calculating your net worth is that it is meant to be a snapshot of your net value at that particular time and place.  Many would argue that the current bubble-like real estate market is reason enough to not trust your home value enough to include it in the net worth.  But let’s be real.  That value, even inflated as it may be, is a snapshot of the value of your home at that time and place.

Inlcude it.  The difference in value from time to time may make it look like your net worth fluctuates a lot more than it really does, but the snapshot will be that more accurate for it’s inclusion.

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