Whether you’re going it alone or with a financial planner, the first step in creating a financial plan is gathering a lot of bits of paper—or, more likely these days, cutting and pasting numbers from various web-based accounts into a document or spreadsheet.
You may complete the following steps as an individual or a couple:
Calculating net worth
To figure out your current net worth, list all of the following:
- Your assets: This may include a home and a car, some cash in the bank, money invested in a 401(k) plan, and anything else of value that you own.
- Your liabilities: These may include credit card debt, student debt, an outstanding mortgage, and a car loan. In some cases, you may have access to a grace period or moratorium.
The formula for your current net worth is your total assets minus your total liabilities.