New to the Live Richer Challenge: Net Worth Edition? Learn more about it HERE.
Missed some of the Challenge tasks? Catch-up then come back…
Day 1: HERE: What does net worth mean?
Day 2: HERE: Why is net worth important?
Day 3: HERE: Your Liabilities
Day 4: HERE: Your Assets
Week 1: A Wealthy Mindset
Today’s Easy Financial Task: Calculate your net worth.
How to rock this task:
- Calculate your net worth
- Calculate your debt-to-asset ratio
Welcome to Day 5 of the LRC: Net Worth Edition!
This week is flying by, right?
We’re five days in and crushing this Challenge!
How does it feel now that you’re getting a better handle on managing your net worth?
*insert total body roll*
Understanding how net worth works is taking you closer and closer to financial independence.
The feeling of being free from money worries is one that I want for you, and the lifestyle you’re on the journey to having when you complete this Challenge.
Let’s keep going.
Calculate Your Net Worth
For the last two days, you’ve been writing down your liabilities and your assets.
You need to complete the tasks for those days before doing the task today. You should have completed the liabilities and assets columns on the Your Net Worth worksheet.
Again, you can find that worksheet HERE.
To calculate your net worth, subtract your liabilities from your assets.
Here’s the equation:
Assets (what you own of value) – Liabilities (debt) = Net Worth
Put your answer to this equation in the space for net worth on the worksheet.
Take a moment today to reflect on this number.
You may even want to go back to your goal for this Challenge to make adjustments.
The tasks for the rest of this Challenge will be giving you actionable steps you can take to increase your net worth! *insert Harlem shake*
You’ll choose a few of these action steps to add to your Goal Sheet later on.
But, before you go anywhere….
You have one more task for today!
Calculate Your Debt-to-Asset Ratio
There’s a second equation I want you to do. It’s called your debt-to-asset ratio.
Your debt-to-asset ratio is a comparison of how much debt you’re carrying to the assets you have.
The calculation for the debt-to-asset ratio is:
Your Debt / Your Asset = Debt-to-asset ratio
There’s another space on the Your Net Worth worksheet to place this number.
Of course, the lower your debt-to-asset ratio the better.
Checking your debt-to-asset ratio every so often can keep you aware of how much you’re borrowing compared to how much you’re growing your assets.
If you notice that you’re consistently doing more borrowing than saving or investing, you need to make some changes.
Typically this is an exercise that business owners and companies do in order to determine the financial health of their organization. I believe that you should begin to think of your finances in a similar way.
What to Do After Getting Your Results
Take a long, deep breath.
If you’re a recent graduate or still repaying student loans, you may find that you have a negative net worth or high debt-to-asset ratio.
Shooooot, you may also have a significantly lower net worth and higher debt-to-asset ratio if you’re in the middle of your career or a higher income earner with a sizeable amount of debt.
Regardless of your situation, don’t freeze up and don’t panic.
You being here and taking part in this Challenge means you’re already committed to moving in the right direction.
NEXT WEEK is all about increasing your net worth. I’m going to give you tools throughout this Challenge that you can use to grow your assets and net worth. Yup!
Sidebar: Did you know that I have an online school, too?
Yup, the Live Richer Academy.
There I and an amazing group of experts and instructors share much more in-depth tools and courses to help you.
Resources include classes on repaying debt, saving, starting a business, investing, repairing your own credit, side hustling, couponing, manifesting your dream, and much, much more! You can learn more about the Live Richer Academy HERE: www.JoinLRA.com
Tomorrow and the next day will be for review and encouragement.
Are you a little behind on tasks?
You have two full days to go back and catch up with tasks.
How’s your accountability partner(s) doing?
Remember, if you need help during today’s task reach out to them. You can continue the discussion in the comments below as well. I love to read comments!
Also, tell the good folks on twitter what you’ve learned today. Let’s get the Challenge trending!Today, I calculated my net worth and debt-to-asset ratio. Woot woot! Day 5: #LiveRicherChallenge #LRCNetworth Click To Tweet
You can reach out to me here:
Facebook: The Budgetnista
Private Forum: Dream Catchers : LIVE RICHER
P.S. Don’t forget to get your free Live Richer Challenge: Net Worth Edition Starter Kit. GET IT HERE.
P.P.S. Here’s a copy of the Challenge Calendar. It’s a fun way to keep track of your progress.
Click the link below and get your copy.
- affordable living
- ask the budgetnista
- budgeting & saving
- business tips
- buy car
- Consumer reports
- creative summer fun
- credit cards
- credit report
- credit score
- Financial help
- identity theft
- LIVE RICHER Challenge
- live richer credit
- live richer net worth
- money mindset
- reduce spending
- save on groceries
- side hustles
- small business
- student loans
- summer fun
- summer fun on a budget
- thank you
- The Frugal FAB 5
- travel tip
- value added
- ways to save
And I heard her say…
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