Robert Kiyosaki appeared on ABC New in April to teach audience how to get smart with their Money.

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Robert Kiyosaki on ABC News

It also is critical to look at your overall financial situation to determine if you are getting ahead from one year to the next. A “net worth statement” helps you determine “where you stand” and serves as a measure of your overall financial position.The net worth statement is a summary of your financial position at a particular point in time (on a given date). It is a list of all your financial assets (what you own) and all of your financial liabilities (the debts that you owe). Net worth is the dollar amount you have when you subtract everything you OWE from everything you OWN.

You will need this information when you:

• borrow money;
• apply for a home mortgage;
• determine insurance needs;
• plan your retirement;
• write your will and determine estate planning needs in the event of death, divorce, or remarriage;
• settle a divorce.

What Are Your Assets?

Assets are any financial or material possessions that have monetary value. On the net worth statement the value is listed at the current market value, not what you paid for it. Assets include things such as:

• Cash on hand or in savings accounts (including certificates of deposit or checking accounts)
• Stocks, bonds, mutual funds
• Cash (not face) value of life insurance
• Money others owe to you
• Annuities, retirement plans
• Employee benefits such as company stocks
• Your home
• Other real estate and business interests
• Automobiles, trucks, other vehicles
• Household furnishings, antiques, jewelry, books, coins, artworks, etc.

What Are Your Liabilities?

Liabilities are the financial obligations or debts you owe to other persons or institutions. Included are:

• Mortgages
• Installment loans (cash advances, auto, etc.)
• Department store and credit card debts
• Taxes owed
• Unpaid bills (medical, utilities, etc.)
• Any other liabilities

Figure Your Net Worth

Total your assets and your liabilities. Subtract the liabilities from the assets. The result is your financial net worth.

Now that you have taken the time to calculate your net worth, how do you feel about your financial situation? Happy? Relieved? Discouraged?

If you are a bit discouraged, do realize that a negative net worth statement may easily happen to someone just starting out on their own or to young families. Just as a photograph shows how you looked at one specific time, so too, the net worth statement reflects your financial situation at only one point in time. It should be updated at least once a year or as your financial situation changes.

 If you are not satisfied with your net worth and want it to grow, develop a plan to increase it. More income, lower living expenses, and/or more investment growth are some alternatives.

To increase your savings you may have to cut spending in some areas. Also, make sure that your savings and investments are yielding the best financial return for your situation. You may want to reduce your present debt level by making regular payments and not adding any other debts. These are more specific examples that may result in increasing your net worth.

If you are like most people, your overall goal will be to increase your net worth each year. Developing a financial plan means taking control of what you have now and disciplining yourself to manage your money to reach these goals you have set for yourself and your family.

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What is Net Worth?

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By Barbara Hagenbaugh, USA TODAY

WASHINGTON — U.S. teenagers are making little headway when it comes to financial literacy, a survey out Wednesday shows.

High school seniors on average answered 52.4% of a 30-question financial survey correctly. That was up from 52.3% when the survey was last conducted two years ago but down from 57% in 1997, the first year for the survey, according to the Jump$tart Coalition for Personal Financial Literacy.”Financial literacy is still a very significant problem. It doesn’t seem to be getting any better,” says Lewis Mandell, a professor at SUNY Buffalo School of Management who oversaw the survey, which was conducted in December and January. It includes topics such as investing and managing personal finances.

He said the lack of knowledge was troubling given that today’s high school seniors likely will be more responsible for their own financial well-being when they retire given trends away from company pension plans and an uncertain future for Social Security benefits.

But the study suggests students are unprepared for such a task, Mandell says.

In one question, only 14.2% of the students correctly answered that stocks would have the best growth potential for money over an 18-year period. That was the lowest percentage in the survey’s history.

“In the 21st century, the only person you can really count on is yourself,” he says.

The results of the survey taken by 5,775 high school seniors in 37 states were unveiled at a news conference in the boardroom at the Federal Reserve. Fed Chairman Ben Bernanke called improving financial education “vital to the future of our economy.”

Survey details:

• White students answered an average 55% of the questions correctly vs. 44.7% for blacks and 46.8% for Hispanics. The gap between whites and blacks was the widest in the survey’s history.

• Students from families with incomes of $80,000 or greater answered 55.6% of the questions correctly on average vs. 48.5% for those with incomes less than $20,000. The gap between the two income groups was also the largest in the history of the survey.

• Nearly 17% of the seniors had taken a money management or personal finance class, down from 20% in 2004. Surprisingly, students who had taken a class actually fared worse than those who did not. Students, however, who had played a stock market game, in which they used play money to pick stocks, fared better than students who had not participated.

• There was little difference in financial literacy based on gender. Boys on average answered 52.6% of the questions correctly vs. 52.3% for girls.

Students aren’t the only whose financial literacy is lacking. In a survey of 1,000 adults conducted last month for the Financial Services Forum, only 57% said they knew “quite a bit” or “a great deal” about managing their personal finances and retirement savings.

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U.S. teenagers lack financial literacy