Take an honest look at your entire financial situation — what you own and what you owe. This is a “net worth statement. ” On one side, list what you own. These are your “assets. ” On the other side, list what you owe. These are your “liabilities” or debts. Click here for a printable Net Worth Worksheet. Subtract your liabilities from your assets. If your assets are larger than your liabilities, you have a “positive” net worth. If your liabilities are larger than your assets, you have a “negative” net worth.

You’ll want to update your “net worth statement” every year to keep track of how you are doing. Don’t be discouraged if you have a negative net worth -- following a financial plan will help you turn it into positive net worth.

The next step is to keep track of your income and expenses. Click here for a printable Monthly Income and Expenses Worksheet. Write down what you and others in your family earn and spend each month, and include a category for savings and investing. If you are spending all your income, and never have money to save or invest, start by cutting back on expenses. When you watch where you spend your money, you will be surprised how small everyday expenses can add up. Many people get into the habit of saving and investing by paying themselves first. An easy way to do this is to have your bank automatically deposit money from your paycheck into a savings or investment account.