napkin drawn by Carl Richards, whose article inspired this post; link below If your financial life is in disarray, and you don't know where to begin planning, start by creating a balance sheet. This is the basis of all accounting: Assets = Liabilities + Equity. This can be restated in a format simpler for personal finance as: Assets minus Liabilities = Net Worth In a systematic way, just list your assets--the items that you own or have control of--on one side of the balance. These would include bank accounts, investments, real estate, personal property such as computers and furniture, jewelry, cars and any cash you keep on hand. Then, use statements or the internet to determine the value of each asset. You want to be sure to list your assets at their current value, so use Zillow or another service to determine property value, and "blue book" value for your automobiles. Check eBay to see what other assets might be selling for. On the other side of the equation, list your liabilites--credit card balances, mortgages, car loans, student loans, and anything else you might owe. These are usually easier to value because almost always there is a certain exact amount due. Check your last statement, or go online to check your current balance outstanding. When you are done, subtract your liabilities from your assets, and you will arrive at your net worth. If you want to increase your net worth, you either need to add more assets or decrease liabilities. It is arithmetic, not some kind of hocus-pocus. Over time, you can create reasonable and achievable goals to improve your financial position. Source: " A Simple Place to Start: Your Net Worth " by Carl Richards , New York Times Bucks Blog, October 1, 2012. Follow up: The obvious follow-up is to create your own personal balance sheet: what is your net worth? Get a small but sturdy notebook, and record your net worth information there. Make entries in the notebook whenever you make a major financial change, and calculate your net worth on an annual basis. Start a graph if you wish as well. May your wealth increase, and may you meet all of your financial goals.