Paycheck Chronicles

Self-Assessment For The New Year


One great way to track your overall financial progress over time is to keep track of your net worth.  I like to do it during the week of New Year's, because I can remember and that gives me consistency.  It usually takes an hour or two, and it gives me some great insight into how all the little things I've been doing can add up to have big results, either good or bad.  In addition to giving me encouragement that we're doing well, or inspiration to do better next year, the process of sorting through all our financial stuff helps me identify places for improvement.  It's a good way to start a new year.

If you've not calculated your net worth before, it's not hard.  It might be a little time-consuming, especially if you have lost log-ins for various accounts.  Start with a piece of paper, use a computer program (spreadsheets make the math easy,) or use online software like Mint.  Gather all the information for these categories.  Here are your categories:


  • Cash or Cash equivalent:  here list any bank accounts, savings bonds, or any other accounts that you could cash in within a couple of days.
  • Investments:  Non-retirement stocks, bonds, mutual funds, fall into this category.
  • Retirement:  IRAs, TSP, and annuities go here.  You might want to try to calculate the value of a military pension; I choose not to but I do keep in mind that it exists.
  • Real Property:  Real estate, and any other large assets such as cars and boats.  Some people choose to include things like furniture, clothing and jewelry in a personal property category.  I don't because I can't really predict how much I might earn off all those items if I were to try to sell them all.
  • Unsecured:  Credit cards, signature loans, and student loans are all examples of unsecured debt.
  • Secured: includes mortgages, car payments, and home equity loans.  Anything that the lender will reasonably try to take back if you stop paying counts as a secured debt.
If you have something that isn't on this list, add it in.  Don't make yourself crazy if you've put in a little effort and you can't find an exact number - estimate!

Once you've gathered all the info, subtract your liabilities from your assets and the result is your net worth.

Don't feel too bad if it's not as high as you think it should be.  Some people will have negative numbers, which can be a little scary.  Even people with a positive net worth might be surprised at how low the number is.  According to, the median net worth in the U.S. is only $86,000, and that includes people who have been working for 50 years.  There are all sorts of calculators that say what you "should" have in net worth, but there not any hard and fast rules.  The important part is that you want your net worth to be increasing over years.  Building wealth is a slow process, but knowing where you are going is the first step.


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