Financial Capability Step 8: Find Your Starting Point

Calculating your net worth is as simple as comparing what you owe (liabilities) and what you own (assets)

 

Calculating your net worth is as simple as comparing what you owe (liabilities) and what you own (assets). Use the simple form below to determine your net worth as of today.

Net Worth Worksheet

Assets: $ Liabilities: $
Cash and Equivalents Mortgage (principal only)
Cash
Checking/Savings Other Debt
Other Home improvement loans
Student loans
Real Property (Mkt. Value) Credit cards
Real Estate Car loans
Car Other
Personal Property
Other Taxes Owed
State and local
Investments Federal
CDs
Stocks/Bonds Contractual Obligations
Mutual Funds Leases, tuition
Other
Total Liabilities
Retirement Accounts
IRA Calculate your net worth
Pension Fund (vested) Assets
Other Minus (-)
Liabilities
Other Equals (=)
Total Assets NET WORTH

 

Calculating your net worth is the best way to know exactly what your starting point is, in any financial plan you develop. It’s essentially the foundation of your financial plan and goal setting and needs to be updated at least several times a year so that you can track all of your progress. Putting together a balance sheet is quick and easy, even if you aren’t a finance expert!

A balance sheet calculates your net worth, by comparing your financial assets (what you own) with your financial liabilities (what you owe). The difference between the two is your net worth. Don’t be discouraged if your net worth is negative — keep in mind that this should be an accurate depiction of your financial situation. Setting goals is much easier once you know what your current net worth is.

Before you get started, pull together all of the information that you have available. You’ll need your latest bank statements, as well as the principal balance of any loans you have. Once you have all of that information available, start developing your balance sheet by listing all of your assets (financial and tangible assets) with the values. You can use the tool on the microsite, or create your own version on paper or in a spreadsheet tool.

• Cash (in the bank, money market accounts, or CDs)
• All investments (mutual funds, college savings accounts, individual securities)
• Home value (the resale value of your home)
• Automobile value (the resale value of your car – use Kelley’s Blue Book if you don’t know)
• Personal Property Value (resale value of jewelry, household items, etc)
• Other assets

The sum of all of those values is the total value of your assets. Your goal should be to continually increase your assets.

Next, you can look at your liabilities, which should be everything you owe. Here are some common liability categories:

• Remaining mortgage balance
• Car loans
• Student loans
• Any other personal loans
• Credit card balances

The sum of all of the money you owe is your liabilities. As you start to pay down your debt, your total liabilities will decrease. The difference between your assets and your liabilities is your net worth. You can start to increase your net worth by decreasing your liabilities, increasing your assets, or by doing both! Make sure you continuously update your balance sheet – at least twice per year – to ensure that you are meeting all of your financial goals.

Facebooktwittergoogle_plusredditpinterestlinkedinmail

Leave a Reply

Your email address will not be published. Required fields are marked *

Comment *