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Getting a Clear Financial Picture: Know Your Net
Worth
by Kimberly
Danger
Before you really start to move
ahead financially, it’s important to get a clear
understanding of your current financial
picture. This financial picture serves as a
benchmark for evaluating progress towards your
goals, and it can help shed light on areas you
may want to improve.
The best way to do this is to
calculate your net worth. Creating a net worth
statement is much easier than you might think.
In simple terms, it’s what you own less what you
owe.
Before you begin, you’ll need to
gather all your current financial records: loan
statements, credit card bills, bank balances,
and so forth. The more up-to-date and complete
the records are, the more accurate your net
worth statement will be. Here is a link to a
printable worksheet to simplify the process:
PRINTABLE
NET WORTH WORKSHEET
First, list all of your assets –
the things of value that you own. Examples are:
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Your home
(current market value)
-
Your vehicles
(blue book value)
-
Current value
of investments: stocks, bonds, CDs, etc.
-
Retirement
account balances: 401(k) and 403(b)
accounts, IRAs, etc.
-
Bank balances:
checking, savings, money market accounts,
etc.
-
Cash on hand
Next, list all of your
liabilities – money that owe. Examples are:
Once you’ve listed all your
assets, total them up. Do the same with
liabilities. Next, subtract the total in the
liability column from the total in the asset
column to get your net worth.
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