Thursday, December 30, 2021

Take This Snapshot

We approach the turn of the year, and I have resolved not to make this post about New Year’s Resolutions.  How boring that would be anyway.  Losing weight and personal finances seem to be the most popular topics for such resolutions, and the media are already rife with suggestions along those lines.

No, instead I will just urge you to take a single action this week.  It need not be something you do throughout the year.  It will only require a few minutes of your time; and if you’ve had to cancel your holiday plans thanks to the pandemic, this is a great way to fill up some of the newly unoccupied time.

Figure out your net worth.

That’s it.  Essentially, and figuratively, just take a snapshot of your financial situation.  It’s as simple as:

                Assets (cash, bank accounts, 401k balance, value of house/belongings, etc.)                       Minus-Liabilities (car loans, mortgage balance, school loans, etc.)                                                       Equals= Net Worth

Instead of waiting for a statement from the investment company or bank, I’ll go on their websites to obtain my current balances.  For my home’s value I’ll use the estimate from  Your creditors likely also have your current balance available to you online.

The bottom line might be discouraging or surprisingly encouraging, but it will always be informative.  And taking this snapshot once a year—ideally at the same time of year—gives you a sense of the direction of your financial life.  Are you doing better than last year (i.e. higher net worth)?  Worse (lower net worth)?

It is not uncommon for people well into their forties or fifties to have a negative net worth.  Large mortgage balances and leftover school loans or new ones taken on behalf of a child in college are the usual culprits for that situation.  Unfortunately, many people carry this situation well into their later years and on into retirement.  That doesn’t necessarily spell financial doom, but it’s not ideal.  If the negative value is not decreasing steadily year by year, it should serve as a call to action.

Of course, sometimes even a financially responsible person sees his net worth decline in any given year.  For instance, I’m in my first year of retirement, no longer have an income, and have started drawing down my savings.  I may well show a decline in my net worth, although I still have some aggressive investments that grew during the year, and Zillow has vastly increased its estimate of my home’s value; so I will be curious exactly where I stand when I do my next calculation.  So you see that sometimes the bottom line is affected by the current market and other factors out of your control.  Take that into account before you panic or perhaps get overly optimistic over your results.

I’ve begun going through this exercise December 31 of each year.  I don’t necessarily decide on a specific course of action or make a New Year’s resolution based on the outcome, but it is interesting to see how my life has (hopefully) progressed financially over the last 12 months.

Or maybe I’m just a personal finance nerd.  Nonetheless, I hope you will try this, at least once.

Thank you for checking my website and reading my blog.  I plan to make some improvements to the site in 2022.

Happy New Year!  God bless you.

Until next time,


“Be sure you know the condition of your flocks, give careful attention to your herds; for riches do not endure forever, and a crown is not secure for all generations.” Proverbs 27:23, 24 NIV*

*Scripture quotations taken from the Holy Bible, New International Version® NIV® Copyright © 1973,   1978, 1984, 2011 by Biblica, Inc.™  Used by permission.  All rights reserved worldwide.