Why Track All Account Types?
Your bank balance tells you what's in one place. Your net worth tells you the whole story. To calculate net worth accurately, you need visibility into every account type - assets on one side, liabilities on the other.
Here are the seven types that together form a complete financial picture, organized by whether they represent something you own (asset) or something you owe (liability).
1. Bank Accounts (Depository)
Checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs). This is your liquid cash - money you can access quickly. The foundation of day-to-day financial life.
- Checking: Daily transactions, bill payments, income deposits
- Savings: Emergency fund, short-term goals, earmarked money
- Money market/CD: Slightly higher yield, less liquid
2. Investment Accounts
Brokerage accounts, retirement accounts (401k, IRA, SIPP, RRSP, Super), and health savings accounts (HSA). These hold stocks, bonds, ETFs, and mutual funds - your wealth-building engine.
- Brokerage: Taxable investing - stocks, ETFs, bonds, no contribution limits
- Retirement: Tax-advantaged (401k, IRA in US; ISA, SIPP in UK; RRSP, TFSA in Canada; Super in Australia)
- HSA: Triple tax-advantaged health savings (US-specific)
3. Cryptocurrency
Bitcoin, Ethereum, and other digital assets held in wallets or on exchanges. Highly volatile, but increasingly part of modern portfolios. Track these separately from traditional investments because the risk profile is different.
4. Property and Vehicles
Real estate (your home, rental properties) and vehicles. These are assets on your balance sheet, but they behave differently from financial assets:
- Property: Generally appreciates over time, but illiquid. Value estimated via market comps.
- Vehicles: Depreciating assets. Track at current market value, not purchase price.
5. Other Valuables
Art, jewelry, collectibles, business equity, or other items with significant value. Include these if they represent more than a few percent of your net worth. Be conservative with valuations - use what you could sell them for today, not what you paid.
6. Loans
Mortgages, auto loans, student loans, personal loans. These are installment debt - you borrowed a fixed amount and pay it back over time with interest. The outstanding balance is your liability.
- Mortgage: Largest for most people. Balance decreases as you pay; property value is the offsetting asset.
- Student loans: Often the first debt young adults carry. Repayment plans vary by country.
- Auto/personal: Fixed payment schedule, typically 3-7 years.
7. Credit Cards (Revolving Credit)
Unlike loans, credit cards are revolving - you can borrow up to a limit, pay it down, and borrow again. The current balance is your liability. If paid in full monthly, it's a convenience tool. If carried, it's typically the most expensive debt you hold (15-25% APR).
Track your credit utilization (balance / limit) - it affects your credit score significantly. Keeping utilization below 30% is a common guideline; below 10% is ideal.
Putting It All Together
When you track all seven account types in one view, several things become immediately clear:
- Your true net worth (not just your bank balance)
- How diversified (or concentrated) your wealth is
- The total cost of your debt (across all accounts)
- Whether your asset growth outpaces your liabilities
This unified view is what separates reactive money management (checking your bank app when you're worried) from proactive financial management (knowing your full position at all times).
A Note for International Readers
The seven categories apply universally, but the specific account names differ by country:
- UK: Current accounts (checking), ISAs and SIPPs (retirement/investing), mortgages, overdrafts
- Canada: Chequing accounts, RRSPs and TFSAs (retirement/investing), HELOC, student loans via NSLSC
- Australia: Transaction accounts, Super (mandatory retirement), HECS-HELP (student loans), home loans
- EU: Girokonto (Germany), Livret A (France), Riester-Rente (DE retirement), PEA (FR investing)