Tips to Calculate Your Financial Assets Correctly

Tuesday, April 11, 2017, AM | Leave Comment

Whether you are just starting your life together or looking for a better way forward, it is important to calculate your household assets correctly.

Creating a balance sheet and valuing assets fairly can be a challenge for any individual, but the process is even more difficult for couples with combined properties. The difficulty of valuing financial assets has led many a couple to put off the whole thing, but that could be a big mistake.

When tax time rolls around, you will need to know where you stand and these can be helpful to know for an overall financial picture.

If you are putting together an estate plan for your kids, you will need to know what you own, and what you owe.

And if there are problems in the marriage, you will want to understand your assets before calling a divorce attorney.

No matter what the reasons, here are some tips you can use to calculate your financial assets the right way.

Tips to Calculate Your Financial Assets Correctly

  • House Holdings

    Get a current appraisal of the family home. For most couples, the family home is their biggest asset, so knowing what it is worth is a great place to start. If your home has not been appraised recently, spending a few hundred bucks to determine its fair market value will be money well spent.

  • Other Incomes

    Identify potential streams of income. Knowing how much money your financial assets can generate is an important part of determining their value, and it can be an eye-opening exercise. From stocks that pay a dividend, to bonds and bank CDs, evaluating your income-producing assets is an essential first step to determining their value.

    Calculate dividend and other fixed-income yields based on cost, not current value. If you do hold dividend-paying stocks, bond funds, and other assets, you should calculate their yield based on what they cost.

    Performing a cost-based analysis will give you a truer picture of these kinds of assets.

  • Using Current Values

    Use current value figures to calculate your balance sheet. When it comes to calculating your balance sheet, you should use the current value of the assets you hold. You can get these figures by looking at your most recent brokerage and mutual fund statements, or by checking your accounts online.

    You can also talk to a financial planner or expert to get the most recent figures. Lawyers specializing in divorce in New York recommend talking to all your banks and financial institutions before this step.

  • Liabilities

    Do not forget about your liabilities and who you owe money to. What you own is an important part of your balance sheet, but so is what you owe. From the outstanding amount on your mortgage to the balances on your credit cards, your financial analysis should include a detailed look at your liabilities as well as your assets.

Whether you are writing your will, planning your estate, or getting a divorce, you need to know where you stand financially.

The tips listed above can help you calculate your financial assets the right way, so there will be no second guessing or worrying about what you might have missed.

Author BIO

Eileen O’Shanassy is a freelance writer and blogger based out of Flagstaff, AZ. She writes on a variety of topics and loves to research and write. She enjoys baking, biking, and kayaking. Check out her Twitter @eileenoshanassy.

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