Net worth

Knowing your net worth is an important part of financial planning and is generally tracked with a net worth statement. If you don't know where you are financially, how can you plan your journey? In simplest terms, your net worth is your assets minus your liabilities, at a specific moment in time. It is generally recommended that you update your net worth statement at least annually. Reviewing your net worth statement may help in identifying strengths and weaknesses in your financial situation.

Why do it?
Reasons for creating a net worth statement include:
 * To check your progress towards financial goals
 * To plan for changes in assets or liabilities
 * To estimate how well dependent survivors would be able to live off their current inheritance if you were to die in the near future
 * To determine the need for life and property insurance
 * To serve as a reminder to make adjustments in insurance coverage or assets held
 * To give an estimate of retirement savings progress

Assets
What do you own? Consider bank accounts, investment accounts, your residence, other real-estate that you might own, cash value of insurance or pensions. Perhaps also the market value of personal property (autos, furnishings, jewelry, ...).

Liabilities
What do you owe? Consider credit card balances, lines of credit, car loans, mortgages, student loans, taxes due.

Updating
Once you have created your net worth statement, don't just leave it to gather dust. It should be part of your annual review process to update your net worth statement to reflect changes that have occurred. Some values will be easy to obtain, such as bank account balances, value of investments, outstanding balances on credit cards and mortgages. Others may be more difficult, such as the value of a residence. Use the best guestimate available, such as your most recent property tax assessment.

Tracking the details
Your net worth statement can also serve the purpose to tracking the location of assets and liabilities and could greatly assist your executor when you die, or your representative should you become incapacitated.

Online tools
Most Canadian banks and financial institutions offer online tools that can help pull together a simple net worth statement. The following list is intended to provide a sample of what is available, you should likely check the website of your financial institution to see if they have a tool that might be useful for you.
 * getsmarteraboutmoney.ca - Net Worth Calculator
 * L'autorité des marchés financiers - Balance sheet (net worth calculator)
 * TD - Personal Net Worth Calculator
 * RBC Royal Bank - RRSP Net Worth Calculator