Here’s How To Easily Calculate Your Net-Worth

Getting a good sense of your financial situation is more involved than just looking at your bank account and seeing how much is in your checking account: it is key to know your net-worth, a much more accurate representation of your financial health. Financial experts recommend calculating net-worth every month so you know where you stand. Here’s how to do it:

List out your assets estimating the value of each and then add up that amount. Here’s what to include:

1. The cash in your bank accounts
2. The value of your investment accounts
3. The value of your car (it’s key to factor in depreciation)
4. The market value of your home
5. Any business interests
6. Personal property that would have value if sold including jewelry, art, furniture
7. The cash value of any insurance policies

Then, you are going to want to make a similar list but this time of your liabilities. Here’s what to include:

1. Your mortgage
2. Car loans
3. Credit card balances
4. Student loans

One you have your two lists and two totals simply subtract your liabilities from your assets and voila that’s your net-worth. Consider this a first to knowing how well you are doing so you can go about reaching your financial goals. Feature Image: Twenty20