This calculator was designed to help you to take a "picture" of your current financial condition. Whereas an income and expense statement shows you your financial picture for a period of time (month, year, etc.), this Net Worth Calculator will show you your financial picture at a single point in time (a specific date). That way, if you compute your Net Worth now, and then again 3 months from now, you will be able to tell whether your financial picture is improving or getting worse.
Starting at the top and working your way down, complete the totals for each of the six sections. Once you've completed the entire worksheet, click on the "Create Report" button at the bottom of the worksheet. This will create a condensed report in a new window that you can print-out and compare to your other Net Worth Reports.
Understanding Your Net Worth
Every so often, individuals need precise calculations about their net worth. Asset statements and credit card bills help construct images of where people stand, but there are other things to consider too. Net worth calculator is particularly helpful for viewing the big picture, because it actually isolates a specificr point in time, rather than capturing data about a span, like a monthly billing period or quarterly brokerage account statement.
The breadth of wealth and debt accumulated over time is hard to track without reliable tools for viewing a wide cross section of investments and expenses. The net worth calculator allows for multiple, diverse inputs, synthesizing the package into an easy to digest image of financial health.
Assets to Consider While Calculating Net Worth
Liquid assets are those held which can be accessed immediately and converted into cash – if they are not already. In other words, cash resources produced at a moments notice, with real discernible value, are considered liquid assets. Some common forms of liquid assets widely held by consumers of various degrees of affluence include the following:
- Cash – Money that you have saved and keep on hand for quick access is a liquid asset. Cash in your wallet, piggy-bank and stuffed under the mattress all represent liquid assets to be plugged-in to the calculator
- Checking and Savings Accounts – One step removed from the cash in your pockets, the resources deposited at banks and credit unions also represent liquid assets. Though they are not bills and coins on-hand, the money held in your checking and savings accounts can quickly be converted to cash, so it is considered liquid.
- Short-term Investments – In many cases, investments made over the short term are considered liquid assets. Unlike long-term investments, which do not fall in this category; short-term investments are not tied to lengthy commitments, allowing them to be converted to cash and mobilized for purchases quickly. Short term funds are found in money-market investments, sometimes used as temporary holding places for cash ultimately destined for other uses.
- Treasury Bills and Savings Certificates – Investments with short-term returns, unrestricted in the way they are cashable provide additional resources for the liquid asset column. Though they carry unique terms, converting them to cash quickly is usually not a problem.
- Life-Insurance – Paying ahead for life insurance builds cash values on policies, which can be cashed-out at any time. Though the cash value does not reflect the same value as a policy's death benefit, it is a liquid asset nonetheless.
Once calculated, liquid assets are combined with long-term investments, comprising the assets used for calculating net worth
Liabilities Offset Assets
On the other side of the equation, money you owe and financial commitments you've made comprise liabilities working against your net worth assets. Everyone's obligations are different, but a few liabilities to consider include:
- Short Term – Credit cards, car payments, and other commitments designed to be paid back quickly are considered short term liabilities, offsetting assets.
- Long Term – Mortgages, business loans and other funding options used for acquiring big-ticket assets are set-up to be repaid over the course of many years. As a result, these commitment fall into the long term liability category.