NET WORTH = ASSETS – LIABILITIES
What I consider ASSETS:
– Cash on hand
– Chequing accounts (the fiance and I still carry separate individual accounts, even though we use one budget spreadsheet – and pay off each other’s ccs etc, pay for wedding vendor downpayments, etc. Shared money!)
– (minus) Work reimbursement money: the fiance gets his reimbursement cheque up front, while I hand in my work receipts at the end of the month then get a cheque.
– (minus) Credit cards. We try to pay EVERYTHING on cc for cashback rewards. We never carry over a balance though and send payments at least weekly.
– Friendly loans: A cousin borrowed money from me a year ago and is paying it off monthly. This is set to be paid off by summer.
– Gift cards
– Vehicles: This differs between individuals. We don’t put value on my fiance’s car. But my car… carries a value that decreases every month. The reason behind is that in a span of 5 months, I had a car written off after an accident AND a car stolen. That’s TWO car loans in 5 months. In order to not take a drastic hit on my net worth, I balanced it out with a car value.
– Car Loans x2
– Student Loan: 5.5% interest 😦
– Emergency Fund: Some consider this an asset since it’s only money set aside and not necessarily earmarked for a specific expense. However, I intend to use this to pay down the fiance’s student loans AFTER the wedding. For now, we need all the liquid we can get.
– Tax Fund: I pay quarterly and save for it every month.
– Slush Fund: We set a $600 discretionary budget for the both of us (which currently, does NOT meet our needs at all, looking to increase this). Anything extra (read: none) goes in this fund.
– Travel Fund
– Gift/ Events Fund
– Car Fund
– Wedding Fund: Summer 2017! Can’t wait!!!
– Charity Fund
As you can see, all our sinking funds are in our liabilities section. This is because these are intended to be spent in the next 1-12 months. We save monthly even for yearly expenses… or at least save for those big expenses little by little in advance.
No mortgage to speak off (yet) so a house asset/ mortgage doesn’t complicate this calculation.
How do you calculate your net worth?