Annual Net Worth Statement

  • Years ago I took a college level personal finance class. It was a lot of work but I learned so much as well. My professor recommended that January 1st would be good day to update and review one's personal net worth statement.
  • Kathee and I do this every year. Because our finances are not that complex I could easily update ours in less than 15 minutes.
  • The above (should be obvious) is just a sample ... not mine. Mine is private between my wife and me.
  • Suggestions
    • I don't include cars. One could easy enough. The asset value of a car could be deduced from websites like Kelly Blue Book or Cars.com. If one has a car loan that has to be included.
    • Include student loan debt. Simplified sample excludes
    • I do not include home furnishings. (They are worth less than one might think!)
    • For home value consider zillow.com. For our's I take the Hennepin County property evaluation. To be even more conservative multiple by .94 to get the value sold (after real estate fees)
  • We track year by year going back several.
  • January 1st is also a good time to know one's credit score. We use MyFico.com
  • For the Christian, one's finances (net worth) is not the most important thing. But it is a helpful discipline.
Other thoughts:
  • It's wise to review one's expenses over a course of time. And if one budgets to review and adjust the budget. We use an aggregator service call yodlee. I export a year's transactions and sift / manipulate that data to come up with budget numbers.
  • Budgeting: We have targeted amounts for key categories like clothing, housing, et cetera
  • We project out our travel plans and estimated amounts. For example this year we hope to travel to Florida to see Kathee's brother.
  • It's good to have liquid reserves. We use INGDirect and have separate savings accounts for Travel, Christmas and gifts, Auto Repair, Auto Replacement, and Taxes and Insurance. One never knows when the transmission will fail, one will have unusual medical expenses, et cetera. We automatically transfer weekly into all of these accounts.

1 comment:

  1. Some who would not need to consider their net worth:

    1.) My mother. She is 92 and has been retired for 30 years. Her net worth is simple. House ... investments. She lives on a pension and SS.
    2.) A High School student. Net worth probably is pretty simple. $ 23 in the bank ... and no debt.
    3.) People who don't care or who prefer to not think about it. (Some people don't even know how much debt they have)


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