A Publication of WTVP

To manage your money successfully, you need a standard by which you can measure your economic progress.

One gauge of your financial headway is your personal balance sheet; it will allow you to see your assets and liabilities, and where your money is going.

You can then take steps to make your net worth grow by finding ways to control spending, reduce debt, and increase savings and investments.

To prepare your personal balance sheet you will need a block of uninterrupted time, pen and paper, or your personal computer. Once you have an initial estimate, you can go into a more in-depth analysis, if you wish. Here’s what to do:

The result of these calculations is your net worth. If assets exceed liabilities, you have a positive net worth. If liabilities exceed assets, your net worth is negative.

You now have a foundation for working toward making your bottom line grow.

Your balance sheet can help you determine whether your finances are in line with your goals.

Depending on your objectives, you may want to pay down old debts or postpone new ones, initiate a savings plan, go on a stricter budget, or begin a more aggressive investment policy.

Recalculate your net worth annually, and you’ll be able to assess your progress and work toward improving your money management. Your financial record keeping will benefit, too. IBI