How to Determine Personal Net Worth

Quite often hear about "net worth" when reading about a particular corporation. (Definition of "net worth" is Total Assets, minus any liabilities.) Ever wonder what YOUR net worth is? When addressing short term, and/or long term financial goals, this is a good place to start. It is really quite simple, and will give you a good idea where you stand financially.

Instructions

Difficulty: Easy

Things You’ll Need:

• Pen, paper
• Calculator
• Latest mortgage statement
• Most recent credit card bills
• Most recent bank statements, brokerage statements, 401k statements.
• Balances on any car notes, loans etc.

1. First, on a piece of paper, make two columns. Column "A" for Assets, Column "B" for liabilities.
2. Under column "A", list you assets. The value of your home, your vehicles. Securities such as, stocks, bonds, even your 401k account. Also add in cash contained in bank accounts, safety deposit accounts. The value of any collectable items, art, can also be included. Total up your assets.
3. Next, begin on column "B". List the outstanding balance of your mortgage, credit cards, car notes, personal loans. Also, be sure to include any back taxes, back child support, accounts that may be in collections, or outstanding medical bills. Total up your liabilities.
4. Subtract your total of column "B" from the total of column "A". A negative answer equals a negative net worth. A positive number is a positive net worth.

Tips & Warnings

• Review annually. Make it a goal, or game if you will, to change your "net worth" (not for the worse, but for the better).
• You can check for your approximate home values at www.zillow.com
• You can get an idea of the approximate value of your car at www.kbb.com (Kelly Blue Book)