Organize Photos


I just got back from a vacation and am in the process of reviewing and editing my photos and videos. It takes a little time, but the product—the highlights of our trip—will be worth it. I will remember the grade school graduation ceremonies of three grandchildren; the hike along the Rim Trail of the Grand Canyon (and my horrible heat rash!); game time around the pool in Sedona, AZ; the Ancestral Pueblo people’s hillside homes in Mesa Verde; and the hike into the foothills above Boulder, CO. I know from experience that I will look at the pictures and videos over and over again, and I will relive not only the sights but also the feelings that make those experiences so memorable.

Did you know that there are financial equivalents of photos and videos? They are important to get a sense of not only where you are right now financially, but they also provide a record of your financial progress over time. Your financial selfies—photos and videos—can also help you plan for the future. There are different names for financial photos—a picture at a specific point in time—and financial videos—pictures that cover a period of time. The financial picture at a specific point in time is called a net worth statement and the video over a period of time is an income and expense statement.

This blog will focus on the net worth statement and a future blog will cover the income and expense statement.

Net Worth Statement

A net worth statement is a selfie, a financial photo. It is specific to the day you compile the numbers. If you compute a net worth statement today, tomorrow, and the next day, each will be different. A net worth statement lists your assets—property that you own—along with their respective market value; and your liabilities—what you owe—along with the amount that you still need to repay. When you subtract the value of your liabilities from the value of your assets, the result is your personal net worth.

                                                                                ASSETS – LIABILITIES = NET WORTH

Hopefully, the result is positive. However, a negative net worth is not uncommon early in your career when your focus is on covering living expenses, paying down student loans, along with creating an emergency fund. (See my blog, Your First Financial Step.) If your net worth is still negative after you have your career in gear, you may need the help of a debt or credit counselor to get on track. There is no shame in that and there are good resources available but make sure that you check the background and get references for a counselor and check the Better Business Bureau rating of any agency before you commit. A thorough check is important because, unfortunately, there are also scammers in this arena.

Changes in Your Net Worth

Early in your career your net worth may be disappointing but as you save and invest and reduce your debt, it should increase. That is the trend that you want to see. How frequently should you take a selfie—compute your personal net worth? That is your decision but starting at least annually makes sense. As you start earning and spending, there is likely to be a meaningful change in your net worth over the course of a year. You can then assess any trends and make plans to offset any changes headed in the wrong direction. As you approach retirement, your net worth may stabilize but there are outside forces that can affect your net worth, too.

For example, changes in the market value of your assets will change your net worth. I computed my net worth in mid-April 2022. If I computed it now, what do you think I would see? I know that my investment assets have dropped in value while the value of my home has increased. Since I am paying down my mortgage and I have only three more payments on my car, my liabilities have also decreased. Without computing the actual numbers, however, I do not know if my net worth has declined. I suspect that it has.

Download this sample Net Worth Template

Here is an example of a net worth template:

                                                    NET WORTH STATEMENT  
Liquid Assets  
     Cash, Checking Accounts, Money Market Accounts  
     Savings Accounts and Certificates of Deposit  
     Cash Surrender Value of Annuities, Life Insurance  
Investment Assets  
     Retirement Accounts – Mutual Funds, Stocks, Bonds, etc.  
     Non-Retirement Accts – Mutual Funds, Stocks, Bonds, etc.  
     Real Estate Investments (not for personal use)  
Real Estate  
     Personal Residence (Current Market Value)  
     Vacation Home (Current Market Value)  
     Farm (Current Market Value)  
Personal Property  
     Furniture and Appliances  
     Computer and Electronic Equipment  
     Art, Antiques, and Collectibles  
     Vehicles and Boats  
Other Debt  
     Credit Card  
     Unpaid Bills  

Where Can I Find the Values?

Where can you find the market values of your assets and liabilities? Statements are a good place to start. Maybe you access all your financial accounts online and that makes it easy to obtain values on any given day. However, if you are the kind of person who likes paper, compiling all the statements at the end of a month or end of a quarter makes sense. Bank, investment, and loan account statements will likely be issued then.

Real estate and vehicle values are a bit trickier. Although they are not precise, real estate websites like Zillow or Trulia will give you an idea of the market value of your home, vacation home, or other property. Likewise, Kelly Blue Book or Edmunds websites are good places to start to obtain a market value of a vehicle. More research may be necessary for any valuable collections or jewelry. Items that have sold on eBay may give you an indication. There are so many websites to help but, at least initially, it may take a little time, just like the editing that I am doing with my vacation pictures. In the long run, however, it will be worth it!

Why is a net worth statement valuable?

Your net worth is a big picture way to measure your overall financial health. Tracking your net worth over time is a helpful indicator of your financial stability. If you need to make a major financial decision, computing a net worth statement with the options you are considering might help you make a better decision. For example, would your savings be better spent to upgrade your kitchen to get a higher market value for your home or should you use those savings to pay down your credit card debt? Of course, there may be other factors involved in those decisions, too, but a net worth statement can be a valuable tool.

Let me know if you have any questions about personal net worth statements and don’t forget that the blog about financial videos is coming!

~Bev Bowers, CFP®


Legal Notice: This document is intended to be informational only. Beverly Bowers does not render legal, accounting, or tax advice. Please consult the appropriate legal, accounting, or tax advisor if you require such advice. The opinions expressed in this report are subject to change without notice. The information in this report is from sources believed to be reliable but are not guaranteed to be accurate or complete. All publication rights reserved. Use of this material is subject to the Copyright restrictions described on BevBowers.com.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark and the CERTIFIED FINANCIAL PLANNER™ certification mark in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.