Harness Money

If you are just beginning to understand your personal financial position, a good place to start is your net worth.

Don’t judge yourself.

This process may be emotionally charged. You have debt or not made the best financial choices in the past. But the truth is that you cannot move forward if you do not know where you are right now.

Lay it all out there. Home debt, car debt, credit card debt, student loans.

The Net Worth Formula

Net Worth = Assets – Liabilities

Liabilities

Liabilities are anything that takes money away from you.

Assets

Anything you own that provides you with money or that has value.

Figure out your net worth. This will give you a starting point.

First you are going to figure out this number and then you will track this number over time. We want to get you to the point where you are increasing this number for the rest of your life.

I use Personal Capital to track my Net Worth. I manually enter the numbers for my assets, like stock accounts, as they change. Not getting paid by them just a tool that I use. You can also use the Mint app.

Recommended Tools

– Personal Capital

– Mint

Click here to read the next article on starting your emergency fund.