Your net worth statement is vital to knowing exactly where you are at financially.

We recommend updating your net worth statement annually, and Bo and Brian usually do it at the very beginning of the year. Your net worth statement is the tool that records successes and failures of your financial life.

What is a net worth statement?

Simply put, a net worth statement is a list of your assets and liabilities and the difference between the two. Include assets such as money in your bank accounts, the value of your investment accounts (including 401(k), Roth IRA, taxable brokerage, and more), the price you paid for your home, and the value of your car. Anything you owe is a liability, and includes mortgages, car loans, student loans, and any other type of debt. A basic net worth template is include in our “30 Minute(ish) Financial Plan.”

Download your free copy of the 30 Minute(ish) Financial Plan, including a net worth statement, here!

Why is it important?

Tracking your net worth allows you to see the year-over-year improvement in your financial life, and can help you stay motivated and know whether or not you are on the right track. It also will tell you how much is liquid, how your asset allocation looks (you don’t want to be retirement rich and illiquid), and what you need to live off of. Without it, you would be flying blind.

In the videos below, we discuss why you need a net worth statement and what all you should include.

Video: How to Calculate Your Net Worth (The Right Way)


Video: The Importance of Having a Net Worth Statement!