How to Determine Your Net Worth in 7 Simple Steps

If you asked me a couple years ago what my net worth is, I would not be able to give you an answer, not even a ballpark. Most people do not know this answer off hand even though this is an important number to know. It gives you a starting point, may it be a positive, zero or a negative net worth. Knowing this number is essential to develop a loving and respectful relationship with your money. To know your net worth, you have to write down all the things you are spending money on, all your debts and liabilities, and of course your financial assets.  

7 Steps to discovering your net worth 

1. Write down all your assets 

These are cash in your checking, savings, 401Ks, 403Bs, IRAs, brokerage accounts, and under your mattress. These are the current appraisal value of your home or homes, cash value of your cars, boats, jewelry, and collectible items. 

2. Write down all your debts 

These are your consumer debt, credit card debt, personal debt, student loans, mortgages, car debt, and IOUs. 

3. Subtract your debt value from your asset value 

This is your net worth. 

4. Go through one month of expenses and list them down to the cents 

It is vital to know where your money is going every month. Remember you are voting with your money, make sure that what you spend it on aligns with your values. Plug the leaks. 

5. Go through one month of income and list them down to the cents

Know your offensive game, know where your money is coming from every month. It is so important to know exactly how much money is coming in every month to see if it balances out with your expenses. 

6. Subtract your expenses from your income 

This is your granular number every month, you cannot grow your net worth if this is always a negative number.  

7. List down your thoughts and the emotions these numbers come up for you 

After you have the objective numerical data, examine the thoughts going through your mind. Write down all your thoughts both the positive and the negative. Then with every thought, write down the emotions that come up for you. This is how you feel about your money, and likewise, how your money feels about you.

What is your relationship with your money? Is it loving? Is it respectful? Is it exciting? Is it inspiring? Do you feel gratitude, relief, or joy? Or do you feel disgust, humiliation, hate, guilt, anxiety, fear, or hopelessness? For more examples of emotions, I like to refer to Brene Brown’s 87 human emotions. Let's get clear about our thoughts and emotions about our money and start to realize that we cannot attract money if we feel shame, guilt, fear, disgust, humiliation etc. If this is how you feel about your money, then we have some work to do.

To help you start this discovery, you can use a beloved product my mother and I created called “Everything you need to know is in My Yellow Notebook” inspired by my late grandfather. Please read the story behind this at: www.bestyearjournals.com 

Cheers to our amazing lives! 

Jolie 

Photo: Beautiful Swiss canton of Luzern. Three generation trip with 10 people and 13 luggage up and down the cobbled streets. Amazing memories nonetheless.