Its 2016! It’s a new year. Whether 2015 was a good year financially or not, you really can’t do anything about it. So what happens before 2016 stays before 2016? Well not really, a business or an individual can set the tone for a better 2016 by taking stock of what worked in 2015 and beyond, what didn’t and actively seeking ways of improving based on the information available to you.

Best ways of doing this includes reviewing your budget for 2015 and seeing where you went over your numbers, preparing a net worth statement that shows you a snapshot of your financial health etc. Consequently going into 2016, the first financial move you should make as a business or an individual is to prepare your statement of net worth.

Here is why? Your statement of net worth shows you where you are financially at any point in time. It’s like your personal statement of financial position or balance sheet as accountants call it. It does this by comparing what you own versus what you owe.

That’s all, the difference between what you own and what you owe.

Knowing your net worth will change your thinking about a lot of financial decisions that you are making. You would start questioning what you are doing with your money in 2016 and not necessarily how much you’re making. You now realise your choices could be affecting your net worth.

Your net worth = total Assets – total Liabilities

If your net worth is positive, this means that you have more assets than liabilities. And the reverse if you have a negative net worth.

The steps

* Get a spreadsheet or a piece of paper, list all the things you own like land, shares, cars and
* Put a value on them.
* Also do a similar list for all the things you owe.
* Add up these two listings; what you own versus what you owe.
* Subtract the latter from the former ; the difference is your net worth!

http://lightednation.com/2016/01/first-financial-move-you-should-make-this-year/