Do You Know Your Net Worth?

Use the worksheet below to create a Balance Sheet and calculate your Net Worth. Once you have completed this see the questions below to analyze the information, so  you  can better understand your financial position.

 

NAME________________________________________________ DATE __________________

 

ASSETS (What You Own)

Cash
   Checking account
   Savings account
   Money-market account
   CD’s, treasury bills
Securities
   Stocks
   Bonds
   Mutual funds
   Other
Real estate
   Residence
   Other real estate (List) –
Business interests (List)
Retirement funds
   IRA
   Keogh
   401(k)
   Vested portion of company plan
   Annuity
Life insurance, cash value
Personal property
   Automobiles and other vehicles
   Household furnishings
   Boat, plane, recreation vehicle, etc.
   Antiques, collectibles, art
   Furs, jewelry
   Other
Other assets (List) –
 TOTAL ASSETS

LIABILITIES (What You Owe)

Current bills
   Credit cards
   Charge accounts
   Medical and dental
   Other (Categorize and list)
Taxes
   Income—Federal and State
   Property—Real and Personal
   Other
Mortgages
   Residence
   Other property (List) –
Business interests (List)
Loans
   Auto
   Home improvement
   Education
   Life insurance
   Margin account
   Other (List) –
Other liabilities (List) –
 TOTAL LIABILITIES

ASSETS – LIABILITIES = NET WORTH

 

YOUR NET WORTH = _____________________________________________

 

Analyze Your Balance Sheet
Determining your net worth is the starting point for everything else you do in financial planning. After you’ve arrived at your net worth, you will find it productive to analyze your balance sheet by asking the following questions about your assets and liabilities.

Has your net worth increased each year, or since your last balance sheet? If it hasn’t, you need to determine the reason and perhaps make some changes in your spending, saving, or other financial habits.

Does your balance sheet reflect a preference for personal assets such as an expensive home, cars, furs, and jewelry? Your balance sheet should show a concern for acquiring investment assets, not just personal assets that are far less likely to increase in value or produce income that will help you meet other financial goals.

Is your debt out of proportion? If your balance sheet shows excessive debt, especially for personal consumption, that’s a signal to review your spending. Keeping debt under control is essential in good financial management.

Have you given enough thought to money needed for retirement? If your balance sheet shows total neglect for accumulating funds for retirement, you’ll want to make some changes as soon as possible.

Are your assets diversified? Diversification is a good hedge against inflation and changes in the economy. Having all your eggs in one basket is seldom a good idea. Also, don’t keep excess cash in non-interest or low interest accounts unless you have an immediate need for the cash.