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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.

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cassiemance243
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 have a negative net worth. Its a snapshot of your financial situation. If you calculate your net worth you will see the end result of everything you've earned and spent as of now. 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. Honestly it can tell you a lot of things. I can go on, but you can paint the picture from here.

It’s a good idea to know your net worth so you can track your financial progress. You can use your income statement to organize monthly income and expenses. Then use a personal balance sheet to organize assets and liabilities on a monthly basis. Use an annual net worth statement to organize your personal finances each year.


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