Setting

Goals

Where are You Now?

Balance Sheet
• Snapshot picture of your financial situation at a specific time

• Examines what you own and what you owe

Net Worth
• Assets (everything you own) minus Liabilities (everything you owe) equals your
Net Worth.
• You want to see your net worth grow over time!
Assets – Think Today’s Value

• Monetary assets
• Tangible assets
• Investment assets
Liabilities – Debts Owed

• Current bills
• Long-term loans
Joe’s Balance Sheet

Assets
Cash in wallet $15.00 Liabilities
Checking account $253.00 Credit card bill $110.00
Savings account $584.00 College loan $15,500.00
2004 small car $4,940.00 Past due telephone bill $65.00
Guitar $150.00 Borrowed from roommate $20.00
Clothing $500.00 Total Liabilities $15,695.00
Furniture $400.00
Computer, 4 years old $420.00
$7,532.00 - $15,695.00 = ($8,163.00)
Cell phone, 1 year old $220.00 Assets – Liabilities = Net Worth
Bicycle, old $50.00
Total Assets $7,532.00
Lifecycle of Net Worth
Median Value of Net Worth
250000

200000

150000

100000

50000

0
Less than 35 to 44 45 to 54 55 to 64 65 to 69 70 to 74 75 and over
35 years years years years years years
Summary
• Balance sheet is a snapshot of your current financial status.
• Assets minus liabilities equals your net worth.
• Calculating your net worth annually – and comparing it to past years –
gives measure of financial progress over time.
• In the U.S., people’s net worth tends to grow until retirement and
then decline during retirement.