The opposite of an asset is a liability. A liability is something you are required by law to pay.
It’s good to have all of this information in one place for each liability:
- Total owed
- Monthly payment
- Interest rate/payments left
- Account number
- Creditor address (payments)
- Creditor address (inquiries)
- Creditor phone
Liabilities
- Car loan(s)
- College/education loan(s)
- Credit card balance(s)
- Debt owed to other(s)
- Home equity loan(s)
- Home mortgage(s)
- Installment loan(s) (appliances, etc.)
- Loan(s) against insurance policies
- Margin loan(s) on investments
- Personal loan(s)
- Pledge(s) to charity
- Second/third mortgage(s)
- Small business debt(s)
- Taxes/bills due soon
Your net worth
| Total assets | ||
| Total liabilities (subtract this) | – | |
| Net worth | = |
Don’t worry if the number is less than $0. Many people with college or home debt have a negative net worth.
Now, let’s look at your cash flow.
Next: Your monthly expenses