Six Easy Steps to Calculating Your Net Worth

Here are some hard and fast tips for figuring out your net worth. See if they don't work for you:

List all of your fixed assets, such as real estate and cars, at their current value. Subtract any money that you owe on these assets, such as your mortgage or car loan.
List all of your liquid assets: cash, certificates of deposit, stocks, bonds and bank accounts.
List all jewelry, furniture and household items at their current value.
Add together all of the above. These are your total assets.
Subtract all of your debts (except those you already subtracted in step 1) from your total assets. The result is your net worth.
Re-evaluate and update your net worth calculations on an annual or better yet, semi-annual basis.

Note: It is advisable to use the after-tax value of your marketable securities (stocks and bonds) when calculating their value.
Note II: If you arrive at a hefty net worth figure in your plus column, don't pump those fists of yours skyward just yet. It's important to make sure the assets that make up your net worth are working in your long-term favor. For example, bank savings probably won't keep up with inflation. That means net worth may actually be declining in real terms every year for people who have all their assets in a savings account.

Building a Budget