Time for Your Financial Physical?

I know, I know, it seems like you just finished with tax season, and the LAST thing you want to do is re-visit some of that ‘taxing’ information.  But, at times, we must do what is BEST for us, not just what FEELS right!  That being said, if you haven’t had a Financial Physical in a while….well, it’s High Time to get after it!!

What I’m speaking of, is computing your own personal Net Worth.  Documenting and dating your Net Worth on an annual basis, gives you a ‘check-up’ if you will, of your Financial Status.  It also gives you a feeling of organization and accomplishment in the area of your personal finances.

If you have never done a Net Worth, what it is, is a listing of your assets and your liabilities.  You can ‘google’ for a Net Worth form, or you can use this one from Frugal Living.  After the info is compiled for both categories, your liabilities total is subtracted from your assets total, and the result (sum) is your Net Worth.  It can be a Positive or a Negative number.  For your own financial health, here’s hoping it’s a Positive!!

As you fill out your Net Worth, here is something you will need to know in regard to your home.  The realistic value (recent appraisal) of your home is an Asset.  If you still have a mortgage on your home, the amount that you still owe on your home is a liability.  If you rent your home, that transaction does not come into play with your Net Worth.  This same process applies to your cars.  They only become strictly assets when they are paid off.

Here’s some of the information you’ll need to do your ‘Physical’:

You will need to have balances of checking, savings and investment/retirement accounts.  You will also need to know the value of any valuable collections you may have, and the value of your home and cars. You’ll need the most recent balances from the debts your household has, including any types of loans you may have.

This entire exercise may be exciting for you, OR it may seem like the most boring thing you could possibly do.  Whichever side of that fence you stand on, knowing where you stand financially is a mature and necessary part of being an adult, and will arm you with necessary knowledge of your personal financial situation.  And these days, that’s something we ALL need to stay on top of!!