Why is it a good idea to know your net worth? Explain how you can use an income statement, personal balance sheet, and net worth statement with regard to your personal finances.

Question

Salmon · Answer

@Ultrilliam

Matchatea · Answer

Net worth is the difference between what you own and what you have. If you exceed your liabilities you have a positive net worth. If your liabilities are greater than your assets you will have a negative net worth. Its a snapshot of your financial situation. Calculating your net worth will let you see the end result of everything you've earned and spent. Net worth statements and all you asked of can help you determine where you are, how to get where you want to be, if your spending  to much. It could tell you a lot of things.