Understanding your net worth is step forward towards money mindfulness

Updated: Feb 27



A personal financial statement is useful as it can be used to analyze your current financial status, enabling you to track net worth and make better decisions on how to accomplish your financial goals. It shows an individual’s Net Worth i.e. their assets minus their liabilities. If their liabilities are greater than their assets, the financial statement indicates a negative net worth. If the individual has more assets than liabilities, they end up with a positive net worth.


Assets are anything of value that you own. These include :

  • Account balances: savings, certificates, money market accounts

  • Investment balances: stocks, ETFs, mutual funds, bonds, annuities, cash-surrender values of life insurance, commodities

  • Real estate

  • Valuable personal property: vehicles, gold, or collectibles


Liabilities are any debts or payments you owe to someone else. These include:

  • Credit cards

  • Education loans

  • Unpaid medical bills or unpaid taxes

  • Mortgages or vehicle loans


If you have a positive net worth in a given period, you can apply that money to acquiring assets or paying off liabilities. If you currently have a negative net worth or you want to increase positive net worth, the only way to do it is to assess your spending habits and adjust them as necessary.



Takeaway :

  • An asset is something that you own.

  • Liabilities are something that you owe.

  • Net worth = Assets - Liabilities


Understanding and keeping a track of net worth is a step forward towards financial wellness and money mindfulness. How frequently do you track your net worth?

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