Have you ever wonder what’s your current net worth?! Net Worth just like Investing isanother foreign word for most of us. It seems like knowing your financial net worth is only reserved for the rich. If you are a common employee, assessing a financial net worth in the present day is found as irrelevant as creating a last will testament.
By definition, net worth means a person’s total assets minus the total liabilities. The result could either be positive (more assets than liabilities), equal to (balance assets and liabilities) and negative (less assets, more liabilities). The sad thing is according to studies, each Filipino born or soon to be born has a total of P 59, 121 in foreign and domestic liabilities (even without you knowing that owe this much) apart from the actual debt that Juan Dela Cruz has.
Knowing our current financial net worth is an important aspect on financial freedom. This could be your reference point, a map that could lead you to a specific destination. It can also be point out that financial net worth is the total net wealth. It can be daunting at first imagining that you are computing for your total assets and your total liabilities but you owe it to yourself to have a marking point. Once you know your Financial Net Worth it will be easier to plan your goals and so on.
Net worth sample
The image on the right is an example of Net Worth sheet that I saw via Google image. As you can see the net worth is divided into two essential stuff, assets and liabilities.
I actually created a template with additional information and resources via Excel. It also has the built in formula so all you have to do is enter the amount. If you’d like a copy do message me your email address through my contact form and I will send you the link 🙂 You can also comment below in the discussion box or email me straight at email@example.com.
Why Knowing Your Financial Net Worth is Important?
The importance of knowing your net worth as early as now is to help you in your financial decisions. Once you have an overview of what you own (assets) you can simply examine whether they are giving you any active or passive income. You can deliberate whether to let go of an item or not. You can realize how many funds are being wasted that should have been part of your debt payments. Once your done calculating your personal net worth you can now review your current financial status. You can do this every 3 months or whenever you have a big financial decision to think about. Again your aim is to have a positive net worth, more than positive if possible.
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Izza of SavingsPinay promotes financial literacy for the young and young at heart by providing insights and tips on budgeting, saving, investing and online entrepreneurship. Aside from this blog she also writes at www.izzaglino.com, a beauty and lifestyle blog for frugal Pinays and manages, www.izzagevents.com, a wedding and event business since 2011. For inquiries, topic suggestions or future collaborations email her firstname.lastname@example.org