Assets include investments, bank accounts, brokerage accounts, retirement funds, real estate, and personal items like your car or jewelry.
Liabilities include your mortgage, loans, credit card debt, student loans, and any other debt.
Regardless of your financial situation, knowing your net worth can help you evaluate your current financial status and plan for the future.
Your net worth will fluctuate, however, it is not the day-to-day value but the overall trend that matters; as you age, your net worth ideally should grow.
By knowing where you stand financially, you will be more mindful of your spending, better prepared to make sound financial decisions,
Your net worth is the amount by which your assets exceed your liabilities, or what you have versus what you need to pay off.
Knowing your net worth is important because it can help you identify areas where you spend too much money.
Just because you can afford something doesn't mean you have to buy it.
To keep debt from accumulating unnecessarily, consider if something is a need or a want before you make a purchase.