Having and updating your very own personal net worth statement is one of the most beneficial ways of viewing your current financial status and can be a deciding factor in decisions such as buying a house, car or taking time off work.
While I believe that it is crucial to create a monthly update of your personal net worth, I also think it is equally important to make your future net worth statement as well.
Here is how it works. After you calculated your current net worth (hopefully it is positive!) Try to think out of the box and create a net worth statement sometime in the future. I usually create one a year from my current statement. Try to come up with realistic numbers of where you are expecting to be financially. The benefits of creating a future net worth statement are numerous and are as follows:
- A future net worth statement is highly motivational as it is almost in the same line as goal setting. The more realistic the goals are, the better the chance of you reaching them and accelerate your motivation!
- This statement can give you a much more clear picture of where you can expect to be down your road in life and can help you plan more precisely major buying decisions.
- Creating a future net worth statement is a great way to teach self control as you strive to achieve your own expectations. A future net worth statement set a year from now is a little easier to meet compared to budgets as you do not feel as “hand-cuffed” on a weekly basis. (Budgeting is still a great way to achieve your goals. Consider a future net worth statement a beginners tutorial in budgeting!)
There are many other advantages that can be branched off from the above mentioned 3 points but the main benefits are there. I am currently in the process of making my own future net worth statement and will be positing it by the end of the month.