Dreams of dollar signs flash in our eyes. Before you start dreaming money, money, money, evaluate your current financial situation. Last night, I updated my net worth and jumped for joy. I’m hoping you can do the same:

Your net worth is what you have (or owe)—your personal bottom-line. You basically want to determine if the things you own (assets) exceed your outstanding debts (liabilities). Banks want to know this stuff when you apply for a loan, and you might want to know these numbers for yourself. Pull out statements, online accounts, and other current sources to calculate updated totals for each applicable item. I use excel for quick math.

1. ASSETS: what you own

• Checking accounts
• Savings accounts
• Stocks and bonds
• Cash value of life insurance
• Real estate owned (market value—I use the latest appraisal from property taxes)
• Vested interest in retirement funds
• Net worth of business(es) owned
• Owned vehicles
• Other assets, itemized (List items like wedding rings, jewelry, and other largely valued items. Many people—myself included—don’t include this area because we’re not going to give up our wedding rings or other possessions.)

TOTAL ASSETS: (sum of all the above)

2. LIABILITIES: what you owe

• School loan
• Mortgage, home equity loan
• Investment loans (for business, property, etc.)
• Credit card debt
• Vehicle loan
• Other debt (IRS debt, money borrowed against retirement account, outstanding medical bills)

TOTAL LIABILITIES: (sum of the above owed amounts)

NET WORTH = TOTAL ASSETS – TOTAL LIABILITIES

Your goal is to have a positive net worth, obviously. Then, the goal is to grow that number. I like to update every six months to chart my progress and make plans. Next Friday, we’ll address those plans with more weekend homework (ugh) on goal setting.