Do you know how much money you managed to saved for the whole year? This is the additional amount of money you managed to add to your financial net worth. Most people do not know their yearly saving rate, and may even be surprised they actually spent more than what they have earned over the past 12 months. Obviously, this is very bad for any long term financial planning. To track whether you are progressing well financially towards major goals such as buying a car, house or retirement funding, you need to calculate your net worth on a yearly or even monthly basis.
The amount of money you saved over the past year is simply the change in your net worth over this 12 months. The difference between your net worth calculated this year and for the past year will indicate whether you have made positive progress or backtracked with losses. Obviously, it is very difficult to try and calculate your net worth 12 months ago if you do not have this figure now, that is why it is important to regularly calculate and record these financial numbers regularly or simply use personal finance software such as Quicken to help you track savings, investments and expenses automatically.
If you hate tracking expenses rigorously, an easier option is to simply put at least 10% of your income into a savings or retirement account and never touch the money inside for any short term consumption purposes. The important action here is that you must do regular savings, and there is no point in tracking all your expenses every day only to have no surplus cash for savings and investments. Note that this 10% is intended for long term financial goals such as retirement. Mid term goals such as buying a home, getting married etc means you need to save more money from your monthly income as well, leaving less for personal entertainment and recreation unless you have a big paycheck. With a healthy habit of monthly savings, you will be able to rely less on high interest credit cards and unsecured installment loans for bad credit which can be damaging to your long term financial goals.