As we move through adulthood, it’s smart to keep an eye on continually boosting your financial health. Indeed, the Japanese concept of “kaizen”, meaning “constant improvement”, is an excellent way to think about your finances.

A financial life cycle has many stages. Money can seem tighter when you’re young and newly employed. The middle stage tends to bring bigger incomes, but also bigger expenses, especially if you have children. And at retirement, the game changes to no income at all.

So if income changes so much, how can we easily measure whether we’re doing better financially this year versus last year, or versus ten years ago? The answer is to ignore income and instead regularly track your family’s net worth.

Net worth is well summed up by its name: It calculates what your money, investments, and assets are worth “net” of what you owe others. It’s what you’d have left if you had to settle every current debt and financial obligation.

This is a much more holistic way of assessing how you’re doing financially, as it deducts for debt and increases for savings. For instance, making $200,000 a year isn’t all that impressive if you're saddled with a six-figure student loan, massive mortgage, or credit card debts.

To use net worth as a personal measurement tool, simply create a chart or spreadsheet that lists the value of all your financial accounts and assets, then lists every debt you owe, and then subtracts debts from assets. This result is your net worth on that date.

From there, just create a new column for the next time period, edit the inputs as they stand then, and see how your net worth has changed. To keep yourself on track, simply repeat this process at least once a year, but ideally every quarter.