What’s Your Net Worth?
Posted by Gail | Filed under Money Management
We’re half way through the year and I’ll bet dollars to donuts you haven’t done your mid-year net worth statement to see how you’re doing!
One of the best ways to see how you’re doing on the savings front is to track your net worth. By monitoring your progress towards your savings goals, you’re more likely to stay focused. Fanatics do this as often as every month. But you should have a life, so doing a net worth update every six months or so should suffice. However, if you need the motivation to keep saving, by all means check how you’re money is growing more often.
There are several net worth calculators on the web, including under my Resources tab: Net Worth Statement Find yourself one that you like and plug in your numbers.
People routinely include their “personal effects” as an asset. Don’t bother. These aren’t very saleable and you’re just deluding yourself if you give your stuff more value than you could ever realize from selling it.
On the liabilities side of the equation, don’t forget to include your overdraft (if you’re in it), buy-now-pay-later purchases on which you still owe money (even if it isn’t due yet), back taxes, money you’ve taken from your RRSP to buy a home or go to school, and (heaven forbid) pay advance loans.
If you’re adept at Excel, why not create a net worth spreadsheet of your own (feel free to copy mine) so you can keep track of your improvements over time.
While your net worth isn’t the be-all and end-all of your life – it can’t measure your job satisfaction or your overall sense of contentment – it is a great tool for track where you’ve been and where you seem to be going financially. There’s nothing like the black and white of the numbers to make you really pay attention. As I always say, the numbers don’t lie.