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Articles | Moneywise: Family Finances
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Getting a Clear Financial Picture: Know Your Net Worth
by Kimberly Danger
Before you really start to move ahead financially, it’s important to get a clear understanding of your current financial picture.
This financial picture serves as a benchmark for evaluating progress towards your goals, and it can help shed light on areas you may want to improve.
The best way to do this is to calculate your net worth. Creating a net worth statement is much easier than you might think.
In simple terms, it’s what you own less what you owe.
Before you begin, you’ll need to gather all your current financial records: loan statements, credit card bills, bank
balances, and so forth. The more up-to-date and complete the records are, the more accurate your net worth statement will be.
Here is a link to a printable worksheet to simplify the process:
PRINTABLE NET WORTH WORKSHEET
First, list all of your assets – the things of value that you own. Examples are:
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Your home (current market value)
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Your vehicles (blue book value)
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Current value of investments: stocks, bonds, CDs, etc.
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Retirement account balances: 401(k) and 403(b) accounts, IRAs, etc.
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Bank balances: checking, savings, money market accounts, etc.
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Cash on hand
Next, list all of your liabilities – money that owe. Examples are:
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Remaining amount of your mortgage
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Home equity loans
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Credit card balances
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Auto loans
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School loans
Once you’ve listed all your assets, total them up. Do the same with liabilities. Next, subtract the total in the liability
column from the total in the asset column to get your net worth.
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