Knowing Where You Are

Financial well-being starts with knowing where you are financially today.  Why?  Because figuring out the truth of where you stand financially helps you face and conquer one of the greatest fears for those struggling with financial confidence.  It’s the beginning of the journey.  And one cannot plot a course without knowing the starting place.

A document called a Net Worth Statement, also known as a Balance Sheet, shows where things stand today and is the foundation for setting goals, developing a financial strategy, making wise financial decisions going forward, and ultimately achieving your life vision. 

A Net Worth Statement is also easy to pull together.  It’s simply a list of what you own (financial assets) and what you owe (financial liabilities).  Financial assets include checking and savings accounts, investments, retirement accounts, real estate.  Financial liabilities include a mortgage, car loans, student loans, credit card debt.

Avoidance is a common and understandable reaction, though.  Seeing where one is financially can bring up negative feelings like anxiety and guilt, and can be overwhelming.  Every journey begins with a first step, and like pulling a band-aid off quickly it’s best to dive right in, set aside the fear, and begin moving decisively towards empowerment.  Taking action to create a Net Worth Statement will reduce the anxiety and help you feel confident (at least subconsciously) because it represents your courage to push through the fear of truthfully looking at your financial situation.  Your courageous first step creates momentum towards empowerment.

Tax time is the ideal opportunity to create (or update) your Net Worth Statement.  As you gather the statements for your taxes, make note of what you own and what you owe and the year-end value (or balance) for each. 

Let me help you take your first step !!

Up next - A sample Net Worth Statement and instructions on how to organize the information you’ve gathered.