Money Management Tips for Young Families:

Net Worth Statement

Dr. Jo Turner

Professor, Family and Consumer Economics

How are you doing financially? Are you getting ahead or are you falling further and further behind?

The only real way to know that answer is to prepare a family net worth statement. You may be able to get a general feeling of how you are doing if your savings account is up or down from a year ago, or if your list of creditors has changed. However, that is not the total picture. To know whether you are increasing or decreasing you total net worth, you need to figure your net worth each year. Then, once figured compare it with previous years.

To get started, fill out the form on the back of this page, as of December 31^st of last year. If you do not know what cash you had on hand, or what stock values were, fill in what you can now and next December 31^st record that information for next year's net worth statement.

When listing what you own, use the market value for assets -- house, cars, household furnishings, stock, etc. Antiques and houses may increase in value each year, while cars, clothing and furniture start to depreciate as soon as purchased. Market value is what you would get for the item if you were to sell it.

Housing values may be difficult to estimate. Compute them on the basis of housing prices in your area. Car resale values may be obtained from a book listing resale prices available at newsstands, listing major household furnishings, equipment and clothing items. Except for jewelry and antiques most items have little or no market value. Even though you paid $200 for a new coat, its resale value is very little. Cash-value of life insurance is stated in the policy. Term insurance has no cash value. Retirement plans usually send information on the cash value of the plans each year.