The beginning of the year is a great time to review your net worth. This is a list of your assets vs your liabilities – or put another way how much you own vs how much you owe.

This is a personal balance sheet and provides a good measure of your financial health each year. Obviously, you want to have more assets than liabilities – a positive net worth – but the main reason for the exercise is to check that you are moving in the right direction each year.

You want to know that each year your debts are decreasing and your investments are growing.

To calculate your net worth, list all your assets. This would include your residential property, any property investments, retirement funds and other savings and investments.

For your property valuation either use the purchase price if you bought the property in the last five years, or the municipal value of your property as an indication.

Use the trade value of your car which you can obtain from a dealership.

Then list all your liabilities. This would be your outstanding mortgage and all other debt, including car finance, credit cards, store cards, etc.

Subtract your liabilities from your assets to give you your net worth. This is a figure you can use each year to keep track of your financial health.

Even if you commit just a small amount of money to reducing your debts and growing your investments, it will have a positive impact on your net worth.

Seeing your net worth grow each year will give you the motivation and discipline to stick to your financial goals.