Find Out What Your Financial Position Is

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Find out where you are in your financial life by completing a statement of financial position.

To begin, collect the following information:

Assets – these are things you own
  • Cash/cash equivalents such as bank accounts, Treasury bills, U.S. savings bonds, money market deposit accounts and anything else that can be converted to cash quickly.
  • Invested assets such as retirement accounts, partnership interests and ownership of stock.
  • Use assets such as residence, automobiles and furniture valued at current market value.

Add up the total of all listed assets.

Next collect the following information:

Liabilities – this is any debt that you owe
  • Credit card balances.
  • Bank loans including personal loans, automobile.
  • Balance of mortgages and any second mortgages.
  • Student loans.
  • Alimony or child support.
  • Medical bills.

Add up the total of all listed liabilities.

Subtract the total of your liabilities from the total of your assets, the difference is your net worth. One practical use of the statement of financial position is that you know where you are today. Another practical use is to keep “score” or compare your position from year to year.

An example is provided below.

Assets: Cash/Cash equivalents of $30,000 + Invested Assets of $50,000 + Use Assets of $150,000

Total Assets equal $30,000+$50,000+$150,000 = $230,000

Liabilities: Credit card $2,000, Auto loan balance $10,000, Mortgage balance $160,000

Total Liabilities equal $2,000 + $10,000 + $160,000 = $172,000

Net worth equals Assets of $230,000 – Liabilities of $172,000 = $58,000

You can find financial statement templates on line. For an easy to understand and fill in template click here.