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Week 2 – How To Create Your First Net Worth Statement



This week will be a simple one.  Last week you had a big assignment to create your personal financial binder and this week we’ll be adding the Net Worth Statement to the binder. 

I will be sending out a copy of the excel spreadsheet I created to newsletter subscribers so watch your inbox.

Part 1

Part 2

There are a couple of guidelines to follow in creating your first Net Worth Statement:

  1. Don’t go overboard and try to include all your possessions in the first version.  You should only include your house, cars, and at most 1-3  of your most valuable possessions.  Then, every time you update your statement you can add one or two more items.  Over time you’ll have quite a comprehensive record of your possessions.
  2. The first statement should take you 20-30 minutes to create.
  3. If you haven’t completed your List of Accounts and List of Debts for your financial binder, please do so first.  This will make creating your net worth statement much faster and easier.
  4. In the screencast I mention three resources for determining the value of your assets:
  5. Here’s a list of items you may want to include in your net worth statement
    • Assets
      • Cash
      • Checking accounts
      • Savings accounts
      • Money Market accounts
      • Stocks, bonds, CDs
      • Market value of your home
      • Major household items
      • Market value of other real estate
        • Rental property
        • Time shares
        • Vacation homes
      • Market value of cars
      • Value of Cash-value life insurance
      • 401K accounts
      • IRA and Roth IRA accounts
    • Liabilities
      • Mortgage
      • Lines of credit (HELOCs, etc)
      • Auto loans
      • Credit card balances
      • Student loans
      • Other loans
      • Owed taxes

There are several advantages to creating and updating a net worth statement.

  1. Your net worth is a single number that reflects whether you are making progress financially or not.
  2. Recording a list of your possessions can act as a safety measure if you were to be robbed or have a fire and needed records to get reimbursed for insurance purposes.
  3. Updating your net worth statement keeps you in tune with your various accounts and amounts in them.  It increases your overall financial awareness.
  4. In recording possesions and their worth you may uncover some assets you can sell for a healthy profit and put those assets to use in a more valuable way.

As always, leave any comments or questions below and I’ll do my best to answer them.


Posted in Uncategorized | 1 Comment »

One Comment to “Week 2 – How To Create Your First Net Worth Statement”

  1. You Need A Budget (YNAB) Review | Getting Finances Done Says:

    [...] The reports also show a version of your net worth. While this is useful for quickly seeing the value of your accounts, it won’t be 100% accurate since it doesn’t include any property or possessions. However it would be handy in creating or updating your Net Worth Statement. [...]

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