Net worth

...what are you financially worth today?

Your net worth is what you are financially worth (assets) minus the amounts you owe (liabilities). To discover your net worth make up two columns. The first should be your assets (current value). Examples of this are cash in bank, stocks, real estate, 401k, and personal property. The second column should be a list of liabilities. These include mortgage, bank loans, car loans, credit card debt, and other loans. Subtract the liabilities amount from the assets to determine your net worth.

You should be positive, but many people are not. Regardless, use this examination of your net worth to begin an honest look at your budget. Determine your financial plans and goals, and begin to work for them. This is how people achieve wealth: goal planning and hard work.

For example, if you are swimming in debt and have a negative net worth, make a goal to eliminate some debt. One way to do this might be to sell a vehicle and remove the subsequent auto loan from your liabilities column. Perhaps you can pay off another debt, or accelerate payments on a credit card to get it paid off quicker.

Whatever you do once your net worth has been determined, it should be working toward the financial goals you've established for yourself. Work to reduce your credit card debt and be amazed how quickly your net worth increases.

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Don't get caught up comparing your net worth to another. Your assets and liabilities vary. We all differ in education, age, earning potential, etc. Instead of "keeping up with the Jones'" try to set a personal goal to improve your own net worth and make strides toward retirement.

Only you can do this.