Where to Begin? Calculating Your Net Worth

Have you ever wondered how to begin managing your money?  The first step is to calculate your net worth. This is an eye opening exercise and will give you a good picture of your financial standing.  After you have determined your net worth, you can set some goals to improve your financial future.  Here is a step-by-step guide to help you do so:

 1.  Add the sum of all your assets: 

• Cash and Cash Equivalents:  Cash, Money in your bank account, savings accounts, etc.
• Real Property:  Market values of owned real estate, automobiles and other personal property
• Investments:  CDs, Stocks/Bonds, Mutual Funds 
• Retirement Accounts:  IRA, Vested Pension Fund, 401K
•  Any other asset not mentioned above

2.  Subtract what you owe on the following liabilities:

• Mortgage
• Other Debt:  Home Improvement Loans, 2nd Mortgages, Student Loans, Car Loans, Credit Cards
• Owed Taxes:  Federal, State, Local
• Contractual Obligations:  Tuition, Leases

3.  Net Value of Assets minus Net Value of Liabilities equals your Net Worth. 

Here is a link to a simple worksheet which will help you easily calculate your net worth:  http://www.financialliteracymonth.com/30Steps/Step8.aspx