UPDATED — Do you thinK our community quarantine will be extended? Extended CQ means, some establishments will still be closed. And closed establishments mean no income, and no income means, no work no pay (for some establishments though).
In other words, there is uncertainty.
Some household income will be severely affected. Therefore, we need to check all our assets. Also, just in case our income is suppressed or affected, we know where to get our money. We also need to check all our debts so our responsibilities are clear to us.
Hence, this is the perfect time to determine your net worth.
Knowing your net worth is easy peasy lemon squeezy. I promise!
Net worth means assets less liabilities. That’s it! Told yuh!
Before you can add all your assets, you need to list all your assets.
Before you can subtract all your liabilities from the sum of all your assets, you need to list all your liabilities. So by listing these items, you’re organizing your assets and liabilities.
Haha! One complicated phrase but, just follow these steps:
- STEP 1: List all your assets and their value
- STEP 2: Add all the values of your assets
- STEP 3: List all your liabilities and their value
- STEP 4: Add all the values of your liabilities
- STEP 5: Subtract the sum of your liabilities from the sum of your asset
Download the FREE “Your Net Worth” card below for your reference.
So my introduction is finished! Ha ha!
Below are the 5 reasons why you need to know your net worth during amidst COVID-19.
1. To know all your assets
Before you can know all your assets, you need to list them. Once you list all your assets, you can put a value on each item.
And, voila! You take into account all your assets!
2. To know all your liabilities/debt
Before you can know all your liabilities, you need to list them. Once you list all your liabilities, you can put a value on each item. And, voila! You take into account all your liabilities! Yes! I just copied reason #1 and changed some words! ha ha ha !
3. To organize all your bank accounts, credit cards, etc.
You might have several bank accounts and credit cards. So by trying to know your net worth, you need to list all bank accounts to be put to your assets. Also, you need to list all your credit card to be put to your liabilities.
4. To know how to get to your financial goals
If you know how much you have, and how much you owe (a.k.a your net worth), it will help you make responsible financial decisions. And making responsible financial decision is a stairway to your financial goals.
5. Estate Planning
Estate Planning might intimidate you. But trust me, when you know the basic of estate planning, it will change your point of you in knowing your net worth.
I created a Personal Net Worth worksheet on my previous blog. Check it out!