When making a plan it’s best to know where you are starting to know what you need to change to get to your goal. One key tool for assessing where you are today is calculating your net worth. I calculate personal net worth quarterly.
Total assets – Total liabilities = Net worth
Total assets include things such as – cash, bank accounts, cars, real estate, retirement accounts, stocks, etc. Anything you could sell tomorrow worth over $1000 with a reasonably determined market value.
Total liabilities are what you owe- current balance owed for credit cards, student loans, mortgages, car loans, personal loans, etc.
Total Assets: $355,000
Car Loan $5,000
Credit Cards $2,500
Student Loan $10,000
Total Liabilities: $237,500
Net Worth: $117,500
Calculate your Net Worth using this template:
|Total Assets :|
|Total Liabilities :|
|Assets – Liabilities = NET WORTH :|