Is your budget fit and healthy? To find out, calculate your net worth. Your net worth is a snapshot of your financial health. Here’s how to do it.Calculating your net worth gives you a snapshot of your current financial health and provides a yardstick to measure your financial progress. Your statement of net worth is similar to a financial balance sheet: it shows your assets and your liabilities, and their net value. It’s this net value – the total value of your assets less the total value of your debts – that equals your net worth. Or how much you OWN own after you take away what you OWE. If this sounds complicated, don’t be put off by this off. Calculating your net worth is really easy. To use your statement of net worth, draw it up at the beginning of the year and then again at the end of the year and compare figures.
- Has your net worth increased or decreased?
- Has the value of your assets increased or decreased?
- Has the value of your liabilities increased or decreased?
- And for each of these questions ask yourself why? There may be good answers or bad.