2008 Year in Review

Create a Financial Snapshot

Happy New Year! The beginning of the New Year is a great time to review your finances. Would you like a tool to help measure your financial worth? A net worth statement will give you a financial snapshot of where you are today. You can then use this financial picture to set financial goals for this year, and to measure your progress in the future. A net worth statement is a snapshot of your family’s current financial situation. A net worth statement takes into account what you own (your assets) as well as what you owe (your liabilities). When you subtract your liabilities from your assets, you then know your net worth. This final amount – your net worth – is a number that you can use year after year to compare your progress. Over time, you want to see your net worth grow as you save and invest money for retirement and other financial goals.

To prepare a net worth statement, begin by listing everything you own. For example, list your savings account balance and the market value of your home. Use the “Personal Balance Worksheet” on University of Illinois Extension’s Plan Well, Retire Well: Your how-to-guide (www.RetireWell.uiuc.edu) website to guide you. This secure worksheet is in the Goal Setting section on the website, under Where Are You Now, page 3, and is a quick, easy way to calculate your net worth.

Next, list what you owe. For example, you may have credit card balances, a mortgage loan or other loans to list.

The final step is to subtract the amount you owe (liabilities) from what you own (assets), to determine your net worth. If you use the “Personal Balance Worksheet” on the Plan Well, Retire Well website, the worksheet will calculate your net worth.

Knowing your net worth helps you keep track of your financial progress. You should recalculate your net worth once a year. And, don’t forget to give yourself a pat on the back as you watch your net worth grow!

by  Editor, theCity1.com
January 7, 2008