Everyone wants to spend less and save more. But what is “less” and what is “more” in relation to your money. That is why tracking your net worth is so important. You need to see where you are so that you know where you are going?
Step 1 Assets
Gather all your information on anything that you own that has value. The most obvious would be any cash accounts that you have like checking or savings accounts. Check Kelly Blue Book on the value of your vehicles. What is the value of your home (if you had to sell it today). And don’t forget to include any other investments that you may have (stocks, mutual funds and the like).
Step 2 Liabilities
What are the principle amounts you still owe on the above assets? You may have to do some fishing around, call the lien holders, look at your last statement, whatever it takes, you need to know!
Step 3 Calculate your Net Worth
Take the total sum from step #1 and subtract the total sum from step #2 and you’ve got your net worth (hopefully this is a positive number).
Step 4 Set Goals and Plan
Where do you want your net worth to be 1 – 3 – 5 – 10 – 20 (you get the picture) years from now. Set your goals and make a plan to get there!