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Monitor Your Financial Health Using This Planning Tool

Your net worth reveals how well you have built your wealth.

Most people track their budget to determine how well they are doing financially, but obsessively tracking your budget isn’t good for your mental health nor does it really tell you the truth about your financial well-being. Reviewing your budget is simply making sure you prioritize how you’re spending and saving – similar to how you would need to watch what you eat and the portion size.

A budget doesn’t tell you whether your current financial status is good, bad, fair, or ugly. 

Instead, create a net worth statement to determine and monitor your financial health. It’s also known as your personal financial balance sheet.

But what is a net worth statement? 

Simply put, your financial net worth is the sum of what you own (your assets) minus what you owe (your debt). It’s the heart and beating pulse of whether your finances are healthy.

In its most basic form, if you have more debt than you have assets, your financial net worth is in the red – a not-so-healthy state, generally.

Another data point on your personal net worth statement that tells you whether you’re doing well financially is how much of your assets are liquid versus non-liquid. For example, if 80% of your assets is tied into your home (i.e. a low-liquid asset) and 20% is in retirement and cash savings, then we would say that you need some room for improvement.

As you near “retirement age,” you want to have more liquid assets such as cash, funds in an investment account and retirement accounts (i.e. money you can withdraw in 3 days or less). You don’t want to be house rich and cash poor as you get older.

To calculate your financial net worth, take these 4 steps to determine it. for long-term financial decisions: 

1. Create a one-page document. Regardless of how many assets or lines of debt you have, you can create a net worth statement on just one page.

Add up all your assets, including collectibles, cars, etc., and subtract all your debt. This is calculating net worth in simplest terms.

Each time you check the amount, verify whether the total net worth is better than it was the last time you checked it. Keep it simple.

More advanced programs, like the one we to use with clients called Blueleaf, will show exactly what impacts the change in your net worth, not just an updated balance.

2. Organize your assets vs debt in two separate columns. 

For each line item, include the title, balance, interest rate (if any), type of account, and date of balance.

Gather your most recent financial statements – dating, at most, 3 months old – and include certain valuable assets for which you don’t typically have statements (the value of your cars, collectible items, jewelry, etc.). This forces you to face your financial reality and get organized.

Consider downloading an app to your phone or tablet that’ll aggregate all your accounts, including your loans, into one central place. The automation gives you a real time picture of your growing – or declining – wealth.

In the case of death, this planning makes the management of your estate easier for your executor and your loved ones.

3. Be strategic about balancing your accounts.  

Include line items such as the balance in your checking accounts, savings, and retirement accounts.

Include how much debt you have relative to your assets.

Pinpoint the most urgent issues to address first, such as paying off debt if it is significantly more than the assets. If you have more non-liquid assets versus liquid assets, consider adjusting your budget to rebalance it.

4. Use your net statement for future planning.

For example, you will need to provide all your financial statements to your lender when buying a house. Take time to put together your net worth statement before meeting with a lender to shorten the mortgage or other personal loan application process.

Your net worth statement also serves as a checklist to answer questions such as whether you need to consolidate any accounts, rollover any balances, or need to close any accounts.


Remember, the key is not what you make but how much you keep. Your personal net worth statement makes the financial planning process easier by capturing in one document what areas need the most immediate attention and facilitates in prioritizing your financial goals.

I'm Helen

Having worked in finance for over a decade, I know what matters most to clients. Here, I share with you what you really need to do to stay on top of your money and retire rich.
Retire wealthy. Start planning now.

This data is for informational purposes only and Capital Benchmark Partners, LLC (“CBP”) is not affiliated with any of the businesses mentioned nor endorses them. CBP is not endorsed by any third party entities for their inclusion in this article nor is compensated for mentioning them. *Past performance is not a guarantee of future results. The information contained herein has been obtained from sources believed to be reliable but the accuracy of the information cannot be guaranteed.


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