New year, new view of your financial life
Improving your finances is a perennial new year’s resolution. If you are taking stock of your finances as the new year begins, there is an easy method to get an overall snapshot of your financial health: calculate your net worth.
A net worth statement is a summary of what is owned (assets), less what is owed to others (liabilities). Your assets will include the value of your investment portfolio, the value of your home, vehicles, and possessions, while liabilities comprise items like your outstanding mortgage balance, car payments and any other debts. It is useful because it takes in all your finances, not just the common items you may think about such as your investments or your mortgage balance.
Remember there is no “right answer” or magic number. But understanding your net worth can be helpful with those financial resolutions. For instance, you may have a home with a high value but if it’s matched by a very high mortgage balance, it is not adding much to your net worth overall. Paying the mortgage down may become a financial goal for you.
Increasing your net worth over time is a worthy financial goal. Your savings and investing strategies can play a big role in getting there. We’re here to help!