BAL ANCE
Net Worth Tally your assets first: How much do you have in your bank accounts? What are the current balances on your retirement and investment portfolios? How much would your home fetch if you put it on the market tomorrow? Then tally what you owe, like your mortgage, student loans, credit card debts, and auto loan. That first total minus the second equals your net worth. WHAT TO DO NEXT: “You’re checking for two things: that it’s not negative and that it’s trending upward,” says Thakor. If you’ve never calculated your net worth before, think of this as your benchmark. Wealth doesn’t have to grow in a perfectly straight line—maybe one year the real estate market dips or your stock portfolio stumbles— but you want to do everything you can to nudge this number higher. Of course, if your salary and spending are in lockstep, your net worth can’t rise much. To get things growing, you can either get more money (negotiate a pay raise, start a side project) or hold on to more of what you make (through savings or investing). Or—ideally—do both! KNOW YOUR NUMBER:
L o o k i n g Fo r wa rd
Give Yourself a Money Checkup W A N T T O F E E L M O R E I N C O N T R O L , F I N A N C I A L LY S P E A K I N G ? T H E S E A R E T H E S I X N U M B E R S Y O U N E E D T O K N O W. By Kate Ro ckwo od You see your doctor at least once a year, take your car to the mechanic, set a reminder to spring-clean the house. So why not give your financial health the same annual attention? “Digging through your numbers isn’t an exercise in judgment—it’s a way to make sure there are no surprises and to set intentions for the future,” says Manisha Thakor, founder of MoneyZen Financial Education in Portland, Oregon, and coauthor of Get Financially Naked. Here’s how to assess your financial situation so you’ll be able to see which areas are going strong—and which might need some TLC.
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