It is important to spend time doing some periodic analysis of where we stand from a net worth standpoint. If you do not know what your net worth is, it’s time to find out because you can’t improve what you don’t measure. The first step in determining your net worth is to create a balance sheet. If you don’t know what that is, look it up. It’s simple and you can do this on a piece of paper or in an excel spreadsheet. No fancy tools required.
In one column put all your assets. That’s everything that has value: real estate, cash, stocks, etc. Forget jewelry, forget clothes, and just include the things that realistically have value where if you needed to sell and liquidate, you could easily. On the other side you put all your liabilities, all your debt. This would include credit card debt, mortgages, personal loans, business loans. Anything that you owe money to is on the liabilities side. The difference between the two, your assets minus your liabilities, is your net worth.