Taking charge of our finances is easier when we know what we’re working with. And one of the ways we can find out is by computing our net worth. So while the pandemic has left most of us in survival mode, we can still account for what we currently have and get a better picture of the areas we need to either work on or protect when setting our financial goals.
Here is a quick guide on how to calculate your net worth:
1. Create a list of everything you own, including its value.
If you aren’t sure of the value, you can consult an appraiser or check out its current market price, whichever applies.
2. Get the total of everything on this list, which will then be your total assets.
3. Likewise, list down your debts and add them up.
You can add personal loans, credit card debt, and financial obligations of similar nature to the list. The sum will be your total liabilities.
4. Now, take your total liabilities and subtract them from your total assets. And voila, there you have your net worth.
Easy peasy, right? Now that you know your net worth, you can set your sights on new goals and take more practical steps to help build the life you want for yourself.
Check out these stories for more financial tips: