If you have already taken the first step in developing a money management plan by reading the previous section. You will also need to determine "where you stand" overall by preparing a net worth statement. The net worth statement is the best indicator of your financial position at a particular point in time. It will help you determine the progress toward your own financial goals.

Net worth is the amount you get when you subtract everything you OWE from everything you OWN. This information can also be useful when you:


• Apply for a loan
• Write your will
• Borrow money
• Determine insurance needs
• Settle a divorce

What Are Your Assets? - Assets are any financial or material possessions that have monetary value. Remember these must be valued at the current market value; not what you paid for them, or what you "hope" they are worth. They include things such as:


• Cash on hand or in savings accounts (including certificates of deposit or checking accounts)
• Stocks, bonds, mutual funds
• Cash (not face) value of life insurance
• Money others owe to you
• Annuities, retirement plans
• Employee benefits such as company stocks
• Your home
• Other real estate, business interests
• Automobiles,trucks, other vehicles
• Household furnishings, antiques, jewelry, books, coins, artwork, etc.

What Are Your Liabilities? - Liabilities are the financial obligations or debts you owe to other persons or institutions. The information you gathered for the first worksheet should help you in filling out this portion of the net worth form. Included are:


• Mortgages
• Installment loans (cash, auto etc.)
• Department store and credit card debts
• Taxes
• Unpaid bills (medical, utilities etc.)
• Any other liabilities

Total your assets and your liabilities. Subtract the liabilities from the assets. The result is your Financial Net Worth.

Here are some other suggestions that might be helpful:


• Avoid exposing yourself to things which will tempt you to spend. Stay away from the stores except when you have something you absolutely need to buy. Make a list and stick to it when shopping and then leave the store. Just browsing can lead to buying.
  
  
• Plan your shopping. Go with a purpose in mind. Use that list! Extras you don't really need can certainly push up the total at the cash register.
  
  
• Limit your number of trips to the store or the mall.
  
  
• Don't shop in a weakened condition by shopping when hungry, tired, or depressed you may find you will have a tendency to overspend.