Calculating Your Net Worth: A Snapshot of Your Financial Health
Net worth is a measure of your financial health that reflects the difference between your assets and debts. Here’s how to calculate your net worth:
- List your assets: Start by making a list of all your assets, including things like your home, car, savings accounts, and investments. Be sure to include the current value of each asset.
- List your debts: Next, make a list of all your debts, including things like mortgage balances, car loans, and credit card balances. Be sure to include the current balance of each debt.
- Calculate your net worth: To calculate your net worth, subtract your debts from your assets. If your assets are greater than your debts, you have a positive net worth. If your debts are greater than your assets, you have a negative net worth.
- Track your net worth: It’s a good idea to track your net worth over time to see how it changes. This can help you identify areas where you need to make changes to improve your financial health.
- Use your net worth as a guide: Your net worth is not the only measure of your financial health, but it can be a useful tool to help you understand your overall financial situation. Use your net worth as a guide to help you make informed financial decisions and work towards your financial goals.
By calculating your net worth, you can get a snapshot of your financial health and use it as a guide to help you make informed financial decisions.
