When Was the Last Time You Did a Net Worth Statement?
Taking just five minutes to calculate your net worth can be one of the most crucial steps for managing your finances. Here’s how you can do it on a simple piece of paper:
- List Your Assets
- Cash: Include checking and savings account balances.
- Investments: List stocks, bonds, mutual funds, and retirement accounts.
- Property: Note the market value of your home, cars, and other real estate.
- Other Assets: Include valuable items like jewelry, collectibles, and artwork.
- List Your Liabilities
- Mortgages: Write down the outstanding balance on your home loan.
- Loans: Include car loans, student loans, and personal loans.
- Credit Card Debt: Sum up all your credit card balances.
- Other Debts: List any other outstanding liabilities.
- Calculate Net Worth
- Total Assets: Add up all the values from your assets list.
- Total Liabilities: Sum up all the values from your liabilities list.
- Net Worth: Subtract the total liabilities from the total assets.
Example
| Assets | Amount ($) |
|---|---|
| Checking Account | 5,000 |
| Savings Account | 10,000 |
| 401(k) | 50,000 |
| Home Value | 200,000 |
| Car | 15,000 |
| Total Assets | 280,000 |
| Liabilities | Amount ($) |
|---|---|
| Mortgage | 150,000 |
| Car Loan | 5,000 |
| Credit Card Debt | 2,000 |
| Total Liabilities | 157,000 |
Net Worth: $280,000 (Total Assets) – $157,000 (Total Liabilities) = $123,000
Taking a few minutes to do this simple calculation can give you a clear picture of your financial health and help guide your future financial decisions.
Disclaimer: This guide is for informational purposes only. Consult with a financial advisor for personalized advice.
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