**Step 3: Calculating Your Net Worth **

-Subtract the sum of liabilities from the sum of assets. This gives you your actual net worth. For instance, if the total amount of assets is $200,000 while the total amount of liabilities is $100,000, then your positive net worth is $100,000. You might have a negative net worth in case you’ve more liabilities than assets.

-Know that this is basically a bench mark number not a “be all end all.” The net worth usually changes just as your daily spending does and will go on evolving with time. In case you got a negative net worth, do not fear. Rather, try some new methods of saving money.

-Calculate the net worth on an annual basis. This helps you evolve your overall saving techniques, and see how you are growing over time.

**Tips**

-Be totally honest about all the numbers. Do not embellish your assets, or detract from the liabilities.

-Enter the figures into your ledger and try to update it on a monthly basis. This will help in keeping you accountable, and also provide you a much better example in terms of your overall growth over time.

-Keep well organized records. Having well organized records is helpful since it’ll help expedite your process of determining your net worth. Say for instance, if the key financial statements are all kept in 1 file cabinet, you’ll be able to easily find the needed information much quickly. If the records aren’t organized, this is the best time to start. You can create a Net Worth file where you can keep all your financial records and the future net worth statement(s) for comparison. In case you don’t print out the statements, and you prefer keeping everything on the computer, you can alternatively create a Net Worth file on the computer. Bottom line is, it is going to be much easier (and much more fun) for you to calculate the net worth on regular basis, if you do not have to go hunting down every single piece of information you need.