Do You Know Your Net Worth?

by Kelvin Wong

If you want to be ahead in your finances, you certainly need to plan for it and be organized. First and foremost, you must calculate your net worth. This is the most important starting point. Your net worth is the grand total of your assets minus your liabilities. It is a very useful tool to measure your financial progress. In determining your net worth, you need the financial information concerning all the things that you own and the debts that you owe.

You can use the table on the left as a guide to calculate your net worth. After this exercise, I hope your net worth will turn out to be positive. Otherwise, start planning immediately to get your finances back on track! To improve your net worth, you have to work towards increasing your income (or assets) and decreasing your debts (or liabilities).

Your net worth should be used to track your financial progress from year to year. Do this exercise once a year and continually work towards growing your net worth. Keep your finances in order starting today, and you shall certainly be reaping great dividends ahead!

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