Regarding your financial situation, I’ve said before it’s important to know where you stand. One excellent indicator of where you stand is your net worth. So, let’s define net worth, but let’s make it fun, grammar-school style.
If I have five apples in my basket and I owe three of them to you because
you loaned me three apples last week, my net worth is two apples. Pretty simple,
right? Basically, your net worth is your assets minus your liabilities–what you
have minus what you owe.
Well, that makes sense. But why bother to track it?
Because one’s
net worth is a good picture of one’s overall financial health. Did you know
that if you ignore your financial health, it will go away? Take care of it and
it will take care of you. It’s kind of like your teeth. If you want them to
stick around, brush twice daily, floss regularly, and see the dentist every six
months.
If you track your net worth over time, you will be able to make
sure your wealth is moving in the right direction and make adjustments as
necessary to keep it that way.
So, how do you track your net worth? It’s as simple as listing
those apples (with a value attached) that I mentioned earlier. I found a free, simple
tracking form that I liked at formslaw.com. Feel free to check it out.
Even though you might not want to discuss it, there is one more
reason to track your net worth. Keeping records like yearly net worth
statements (as well as other pertinent information) will make it easier on your
next-of-kin if something were to happen to you and you departed this life earlier
than expected (told you that you didn’t want to discuss it). Doing this for
your family is a huge act of love.
So, show a little of that financial affection to yourself and your loved-ones
and start tracking your net worth on a yearly basis at the very least. This
kind of self-respect might be kind of weird, I know, but you’ll get used to it.
Comments
Post a Comment