Today is a slightly more involved task if you haven’t set one of these up before: I’m making a one-page net worth summary. Once it’s done though, there are various apps and secure online banking schemes you can use to keep track of it more easily.
I’ve written down all the following figures that apply to my personal situation, feel free to pick any of the following that apply to you:
- Current account balance (if positive)
- Emergency fund
- Other savings
- Investments (shares, bonds etc)
- Estimated value of saleable items (e.g. car)
- Mortgage (equity only, although have a brief look at outstanding mortgage)
- Credit card balances
- Loans (including student loans)
- Money owed to friends/family
- Hire purchase agreements (amount left to pay)
- Any other money owed
All you then need to do is subtract liabilities from assets to work out the approximate net worth.
Once that’s done, it’s much easier to understand where the successes and the problems lie in your finances. This makes goal setting and planning simpler too, whether you’re looking for the starting point for paying off your debts or planning your future.
If you think you probably owe a fair amount more than you own, be brave and try to avoid putting this task off. It’s better to know where you stand even if it’s scary.
I won’t bore you with my own small print, but while I’m debt free, I’ve noticed my pensions and investments need some serious bulking up if I want to retire before I turn, I dunno, 95 or something. That’s one for a different to-do list though, not today.
Have you tried making a one-page net worth report? Bit of an eye opener?