Do you know where you stand financially? If you are planning to apply for a home mortgage, seeking financial aid for college, or just getting ready to write a will, knowing where you stand financially is extremely important. You can’t plan for tomorrow, if you don’t know where you currently stand today. Many women are afraid to know their net worth; they are afraid to know how much they do not (or do) have. Finances scare women, almost as much as knowing their weight scares them. But knowing you net worth is key to building your wealth.
Net worth is the total value of your assets (savings, retirement funds, home, car, etc.) minus you liabilities (outstanding loans, credit card debt, etc.). Knowing your net worth gives you insight into the big picture of you life, just as a budget helps you with the month-to-month (and sometimes day-to-day) picture. Knowing your net worth keeps you informed as to whether you can afford to contribute to a favorite charity or even buy your dream home.
- Calculate your net worth. Check out Smart Money’s FREE Net Worth calculator and know where you stand today! Determine where you are now, and decided where you want to be in five years.
- Calculate the amount of money you need to live comfortably in retirement. Go to http://www.agedwards.com/public/content/fcgi/calcs/retplan.fcgi and use their simple worksheet to figure out how much you are going to need to retire, when the time comes. Even if you don’t like what you see, it is better to see it now, than to be living it 20, 30, 40, 50 years from now. Knowing is half the battle, then you can do something about it. According to Wachovia, I am already short over 5 MILLION dollars in retirement savings. Now, 5 MILLION dollars can seem like a scary number, but it informs me as to how much we are going to need to have saved and shows me how much we should be saving yearly to reach that goal.