Your net worth

An important step in developing your financial plan is knowing your net worth. Your net worth is a combination of what you own (your assets) and what you owe (your liabilities).Your net worth helps you know where you are, so you can decide where you want to go. It helps you understand your current financial situation and gives you a starting point for measuring your progress towards your financial goals.

When we started our financial journey, our net worth was at a negative. That helped us determine what our starting point was, and we were able to set our financial goals based on the life we wanted to create for our family.

To calculate your net worth

1. Add up all your assets (what you own). These include:

• Money in your retirement, investment and bank accounts

• Bonds

• Stocks

• personal items/jewelries

• Market value of home

• Your cars

• Cash value on any insurance property

2.Add up all your debts also known as liabilities: These include :

• Credit card debts

• Mortgages

• Student loans

• Car loans

3.Subtract liabilities (debts) from the assets

To improve your net worth

• Get on a budget and stick to it

• Develop a financial plan

• Earn more

• Save more, spend less

• Get out of debt

Start by calculating your net worth and then work on developing a plan to improve it.