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Net worth is an important snapshot of your overall wealth. If you own (assets) m
Net worth is an important snapshot of your overall wealth. If you own (assets) more than you owe (liabilities), you have positive net worth. And if this wealth grows large enough (with a disciplined budget), you can achieve financial independence!
In Excel, create a summary of your net-worth one year post graduation (this is the snapshot of where you expect to be at the start your budget year; see timeline below for timing detail of the net worth statement).
Your net worth will not be as detailed as your budget as most students only have a few asset and liability categories. However, like your budget, include detailed assumptions for how you valued each line item and links for estimating market values (e.g., car valued at Kelley Blue Book value). Include at least two line items for each of the following four categories found in every net worth statement even if it is a minimal amount. If you do not have any debt then still put in the category and have the value be $0. Then for the assumption note next to the category you can say “I do not have any debt but wanted to show I understand the concept.”
Liquid assets (cash or easily converted to cash)
Non-liquid assets (not easily converted to cash)
Current liabilities (due in that first year after graduating)
Long-term liabilities (due after first year)
Optional resource: In this budget template I created Download budget template I created, there is a tab for net worth that you are welcome to use as well as inspiration categories.
Illustrative timeline for when the net worth occurs (at the start of the year post graduation).
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