Wise, Dena

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University of Tennessee, Knoxville: Trace

University of Tennessee, KnoxvilleTrace: Tennessee Research and CreativeExchangeFamily UT Extension Publications9-19-2011SP612-A Tools for Money Management: NetWorth Statement InstructionsDena WiseFollow this and additional works at: http://trace.tennessee.edu/utk_agexfamiPart of the Other Life Sciences CommonsThe publications in this collection represent the historical publishing record of the UT Agricultural Experiment Station and do not necessarily reflectcurrent scientific knowledge or recommendations. Current information about UT Ag Research can be found at the UT Ag Research website.This Parenting, Children and Teens is brought to you for free and open access by the UT Extension Publications at Trace: Tennessee Research andCreative Exchange. It has been accepted for inclusion in Family by an authorized administrator of Trace: Tennessee Research and Creative Exchange.For more information, please contact trace@utk.edu.Recommended Citation"SP612-A Tools for Money Management: Net Worth Statement Instructions," Dena Wise,SP612-A, http://trace.tennessee.edu/utk_agexfami/75Tools for Money ManagementNet Worth StatementInstructionsAdapted for Tennessee by Dena Wise, Professor, Family and Consumer Sciences,  in part from  “Financial Statements,” by Mary J. Stephenson, University of Maryland Cooperative Extension ServiceSP612-A$ $$What this money management tool can do for you...A net worth statement can help you measure progress toward long-term financial goals. Net worthstatements are also useful summaries of your financial affairs, and you may use them in different ways: • If you prepare a net worth statement about the same time each year, you will see how your total net worth changes from year to year. You will want to see if your assets are increasing and your debts are decreasing from year to year – that is, if you are building wealth.• If you have both investments and debt, it may not always be clear whether you are spending more money than you have coming in. If your net worth has declined from the past year, this can signal to you that you need to make adjustments to live within your income and  provide for savings.• If your objective is to analyze your retirement plan, you may be interested in the present and projected future values of your investments as totaled on the statement.•    The estimate of your home and contents may help you decide how much homeownerʼs insur-  ance you need to purchase.• The total of your liquid assets (assets that can be quickly converted to cash) may provide information about how well prepared you are prepared for a financial emergency or loss of income.• You may also be asked to fill out or provide a net worth statement when you apply for a home or auto loan, or talk to an estate planner. Use the worksheet, “Net Worth Statement,” (factsheet SP612-B) to calculate your net worth.This money management tool, the Net Worth Statement, provides instructions for calculat-ing your wealth. Your wealth is the fair market value of your current assets (what you own) minus your current liabilities (what you owe). Use these instructions with the “Net Worth  Statement Worksheet.”At a glance...Step 1: Calculate the value of your assets.•	 Car	values	are	published	by	the	National	Automobile	Dealer’s	Association	and	by	Kelly	Blue	Book.	These	publications	are	available	in	most	libraries,	at	car	dealerships	and	at	lending	institutions.	You	can	also	find	sites	on	the	Internet	that	list	auto	values.•	 The	cash	value	of	a	whole	life	insurance	policy	can	be	found	on	a	schedule	in	the	policy.	It	is	also	available	from	your	insurance	agent.	The	cash	value	is	the	amount	of	money	the	insurance	company	would	return	to	you	if	you	terminated	the	policy	today.•	 Values	of	annuities	are	available	in	annual	reports	or	periodic	statements,	or	from	your	broker	or	insurance	agent.•	 Estimate	the	value	of	consumer	goods	by	using	information	from	second-hand	shops	and	from	classified	ads.	Use	conservative	estimates	because	it	is	not	always	easy	to	sell	used	possessions.•	 The	value	of	collections	and	jewelry	can	be	estimated	by	dealers.“You can’t manage what you can’t measure.”–William HewlettStep 3: Subtract the value of your liabilities from the value of your assets to determine your net worth.Step 2: Calculate your liabilities.•	 The	balance	owed	on	installment	debts	or	credit	cards	is	listed	on	monthly	statements.	If	not,	the	balance	can	be	obtained	from	the	creditor.•	 The	principal	owned	on	a	mortgage	or	real	estate	loan	is	available	from	the	mortgage	holder.Programs in agriculture and natural resources, 4-H youth development, family and consumer sciences, and resource development. University of Tennessee Institute of Agriculture, U.S. Department of Agriculture and county governments cooperating.UT Extension provides equal opportunities in programs and employment.Visit the UT Extension website athttp://utextension.tennessee.eduCopyright 2008 The University of Tennessee. All rights reserved. This document may be reproduced and distributed for nonprofit educational purposes providing that credit is given to University of Tennessee Extension. 11-0205   SP612-A   10M   5/11   E12-5345-00-043-11 

SP612-A Tools for Money Management: Net Worth Statement Instructions

University of Tennessee, Knoxville TRACE: Tennessee Research and Creative Exchange Financial Management UT Extension Publications 3-2007 SP612-A Tools for Money Management - Net Worth Statement Instructions The University of Tennessee Agricultural Extension Service Follow this and additional works at: https://trace.tennessee.edu/utk_agexfinman  Part of the Finance and Financial Management Commons Recommended Citation "SP612-A Tools for Money Management - Net Worth Statement Instructions," The University of Tennessee Agricultural Extension Service, 07-0200 SP612A-5M-3/07(Rep) E12-5315-00-032-07, https://trace.tennessee.edu/utk_agexfinman/18 The publications in this collection represent the historical publishing record of the UT Agricultural Experiment Station and do not necessarily reflect current scientific knowledge or recommendations. Current information about UT Ag Research can be found at the UT Ag Research website. This Personal Finances is brought to you for free and open access by the UT Extension Publications at TRACE: Tennessee Research and Creative Exchange. It has been accepted for inclusion in Financial Management by an authorized administrator of TRACE: Tennessee Research and Creative Exchange. For more information, please contact trace@utk.edu. Tools for Money ManagementNet Worth StatementInstructionsAdapted for Tennessee by Dena Wise, Associate Professor, Family and Consumer Sciences, in part from  “Financial Statements,” by Mary J. Stephenson, University of Maryland Cooperative Extension ServiceSP612-A$ $$What this money management tool can do for you...A net worth statement can help you measure progress toward long-term financial goals. Net worth-statements are also useful summaries of your financial affairs, and you may use them in different ways: • If you prepare a net worth statement about the same time each year, you will see how your total net worth changes from year to year. You will want to see if your assets are increasing and your debts are decreasing from year to year – that is, if you are building wealth.• If you have both investments and debt, it may not always be clear whether you are spending more money than you have coming in. If your net worth has declined from the past year, this can signal to you that you need to make adjustments to live within your income and  provide for savings.• If your objective is to analyze your retirement plan, you may be interested in the present and projected future values of your investments as totaled on the statement.•    The estimate of your home and contents may help you decide how much homeownerʼs insur-  ance you need to purchase.• The total of your liquid assets (assets that can be quickly converted to cash) may provide information about how well prepared you are prepared for a financial emergency or loss of income.• You may also be asked to fill out or provide a net worth statement when you apply for a home or auto loan, or talk to an estate planner. Use the worksheet, “Net Worth Statement,” (factsheet SP612-B) to calculate your net worth.This money management tool, the Net Worth Statement, provides instructions for calculat-ing your wealth. Your wealth is the fair market value of your current assets (what you own) minus your current liabilities (what you owe). Use these instructions with the “Net Worth  Statement Worksheet.”At a glance...ExtensionStep 2: Calculate your liabilities.•	 The	balance	owed	on	installment	debts	or	credit	cards	is	listed	on	monthly	statements.	If	not,	the	balance	can	be	obtained	from	the	creditor.•	 The	principal	owned	on	a	mortgage	or	real	estate	loan	is	available	from	the	mortgage	holder.Step 1: Calculate the value of your assets.•	 Car	values	are	published	by	the	National	Automobile	Dealer’s	Association	and	by	Kelly	Blue	Book.	These	publications	are	available	in	most	libraries,	at	car	dealerships	and	at	lending	institutions.	You	can	also	find	sites	on	the	Internet	that	list	auto	values.•	 The	cash	value	of	a	whole	life	insurance	policy	can	be	found	on	a	schedule	in	the	policy.	It	is	also	available	from	your	insurance	agent.	The	cash	value	is	the	amount	of	money	the	insurance	company	would	return	to	you	if	you	terminated	the	policy	today.•	 Values	of	annuities	are	available	in	annual	reports	or	periodic	statements,	or	from	your	broker	or	insurance	agent.•	 Estimate	the	value	of	consumer	goods	by	using	information	from	second-hand	shops	and	from	classified	ads.	Use	conservative	estimates	because	it	is	not	always	easy	to	sell	used	possessions.•	 The	value	of	collections	and	jewelry	can	be	estimated	by	dealers.“You can’t manage what you can’t measure.”–William HewlettPrograms in agriculture and natural resources, 4-H youth development, family and consumer sciences, and resource development. University of Tennessee Institute of Agriculture, U.S. Department of Agriculture and county governments cooperating.UT Extension provides equal opportunities in programs and employment.Visit the UT Extension Web site athttp://www.utextension.utk.edu/Copyright 2007 The University of Tennessee. All rights reserved. This document may be reproduced and distributed for nonprofit educational purposes providing that credit is given to University of Tennessee Extension. 07-0200 SP612A-5M-3/07(Rep)   E12-5315-00-032-07 Step 3: Subtract the value of your liabilities from the value of your assets to determine your net worth.

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SP612-A Tools for Money Management: Net Worth Statement Instructions

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University of Tennessee, Knoxville: Trace

University of Tennessee, Knoxville: Trace