Money Management Newsletter

Family Business

Net Worth Statement

Dr. Jo Turner, Professor

Family and Consumer Economics

Many Floridians are wondering if they have really progressed financially over the past few months, if they are staying even or even falling behind.  A net worth statement is like a photograph.  A photograph shows what you look like on the day it was taken.  A new worth statement shows what your financial situation is on the day the statement was prepared.

Knowing your net worth, the difference between what you own and what you owe, can help you as you plan your financial affairs to reach your goals.  If you have a negative net worth, you will need to find out why and take appropriate corrective action.

If you have never made a net worth statement, now is a good time to start.  There are really only three steps.  List all you own and the total the value.  List all you owe and total the value.  Next subtract the value of what you owe from what you own to arrive at net worth.

The following can help you do it.

First, on paper or chart such as the one below, make a list of everything you own that has a market value.  This is your list of assets.  It will include such things as cash on hand, bank accounts and other investments.

Don't forget to include money in pension or retirement funds, cash value of life insurance policies, and the market value of your house, business and equipment.

List market value of furnishings, silver and antiques, jewelry, vehicles, and money others owe you.

When you've listed all your assets (things you own), go back over the list and beside each asset put its current market value.  This is the actual amount of money you would realize by selling the item.  Then add these amounts to arrive at your total assets.

On another sheet of paper, make a second list.  This time list all debts, including mortgage balance (only the balance not the interest you will have paid when the loan is paid off), loans, credit card balances outstanding (not the minimum payments outstanding) and any other unpaid bills.  This is what you owe.

Next total your debts and subtract the amount owed for debts from the total value of assets.  This is your net worth.  (Any number of computer programs on the market today will assist you in calculating your net worth.)

From here you can consider whether you are satisfied with your net worth.  You can alter your spending and savings plans to either increase or decrease your net worth.

You will want to continue making net worth statements at least once each year to determine your financial position or progress.  A net worth statement is important to you.  When you apply for a loan the information on your current net worth statement will be an important factor in determining whether or not you receive the requested loan.

For specific help in preparing a net worth statement contact your local county Extension agent.

Net Worth Statement for Five Years
OWNED	2002	2003	2004	2005	2006
Cash On Hand
Checking Account Balance
Savings Account Balance
Market or Surrender Value of Investments
Cash Value of Insurance Policies
Market Value of Real Estate
Market Value of Personal Property
Market Value of Automobile (s)
Profit Sharing or Pension Plans
Money Owed to You
Others (Specify)
TOTAL ASSETS
OWED	2001	2002	2003	2004	2005
Unpaid Bills
Payments Remaining on Car
Payments Remaining on Furniture and Appliances
Payments Remaining on Credit Cards
Payments Remaining on Mortgage
Payments Remaining on Other Loans
Unpaid Balance and Interest on Charge Accounts
Others (Specify)
TOTAL DEBTS
NET WORTH (Owned minus Owed)

Original Publication date: July 2001.