How Do You Figure Out YOur Net Worth?

Knowing your net worth is important for anyone who wants to be financially stable. No matter what your situation, figuring out where you are standing financially will benefit you by giving you more control over where your money goes and will help you when applying for a mortgage, credit card, car loan, or any other financial aid. Your net worth is the difference between your assets (the things you own) and your liabilities (the things you owe). The goal is simply to have more assets than liabilities. To figure this out, get a piece of paper, a pen, and your thinking cap. Write down the value of everything that you own including cash (or cash equivalents), investments, real estate, household goods, retirement funds, etc. Total the value of these assets. Next, list off all of your liabilities. These can include any loans, mortgages, credit card balances, and taxes. Total the value of this list. Now subtract your liabilities from your assets. If you have a positive number you are doing great! If the number is negative, now is the time to figure out what to do to change your financial situation. Something to keep in mind when figuring out your net worth is that you must include every miscellaneous item or investment that is worth money. Everyone will have a different list, but if you are not sure it is best to use a net worth sample worksheet, available online or at your bank, as a checklist.