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Do you know your net worth? Create a personal balance sheet to find out

Twenty/20

CNBC Make It is posting a new financial task to tackle each day for a month. These are all meant to be simple, time-sensitive activities to take your mind off of the news for a moment and, hopefully, put you on sturdier financial footing. This is day 11 of 30.

Balance sheets, which list out all of a company's assets and liabilities, are useful tools for a company to understand how much it is actually worth and for outsiders to determine if it's a worthy investment. When applied to your own life, a financial balance sheet can illustrate if you're on the right path to accomplish your own goals, such as getting out of debt, by showing you how much and what you own, what debts you have to repay and how much you are worth in total.

Today, create a personal balance sheet, referred to as a statement of financial position by financial planners, of all of your assets and liabilities. This will give you a better idea of your total financial picture than a budget or expenses spreadsheet because it lists out all of the big picture things you own and owe, not just what you are spending money on day to day.  

This might take you longer to accomplish than some of the other tasks, but it's worth the effort. Here's how to do it. 

Gather your financial documents

If you've been tracking your spending, then you have an idea of where your money is going. Otherwise, you'll need to collect your monthly loan and credit card statements, as well as bank and investment account balances in order to list out all of your assets and liabilities.

Your assets are things that you own that can have value, including any cash savings, certificates of deposits (CDs), retirement and other investment accounts, the value of your home, other real estate, cars, jewelry or heirlooms. 

Liabilities are money you owe to another person or a financial institution, including credit card debt, student loan debt, car loans, mortgages, personal loans and medical debt.

List assets and liabilities 

Once you have all of your documents, use an Excel sheet or paper and pen (or search for a template online) to list out your assets and liabilities in two columns, side by side. Include the value of each item so you can add up the totals at the end.

All of the values should be from the same day so that this sheet reflects the same, single point in time for your finances. 

Assess your balance sheet

Once you have everything listed out, add up each column and subtract your total liabilities from your total assets. This will give you your net worth

Now take a closer look at each column. What can you change to help you reach your financial goals? You might find that you are investing more than you thought in a 529 investment account for your child's college, for example, and you'd like to move some of that money to your retirement investment account. 

Finally, schedule a reminder to update your balance sheet regularly, such as once a year or every quarter. That way you'll always have the up-to-date information you need to see if you're on track to accomplish your goals.

Don't miss the last five days: 

Check out: The best credit cards of 2020 could earn you over $1,000 in 5 years

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