For the first time in two years, American household net worth has increased. This is an interesting — and encouraging — sign of the current times. According to the Federal Reserve, U.S. households saw an increase of $2 trillion from the first quarter of 2009 to the second quarter of 2009. Some of the items that contributed to this increase in net worth include:

Rise in home prices.
Upward trend in the stock market.
Paying down debt.
Debt write-offs.

Most of this is good news. Indeed, the fact that Americans have been reducing their debt and relying less on credit is quite encouraging. The fact …read more

Has your net worth been affected by the recession?

One of the more interesting books I’ve ready in the last few weeks is The Cure for Money Madness by Spencer Sherman. He tackles the ideas that have grown up in our consumer culture about money and wealth, and offers insight into how we can get over the “money madness” that makes normally rational people behave irrationally when money is involved.

A budget mentality is a nice tool when you are starting out with money management. But eventually, you need to:
Develop a net worth mentality.
This is about the long term, and looking at the big picture of your overall finances, rather than just managing them month to month. My guest post on Moolanomy looks at the difference between a budget mentality and a net worth mentality.
This post is part of the b5media Business Channel Great Blog Off! Find out more about the Blog Off here: http://www.b5media.com/b5media-blogs-for-a-cause-and-raises-money-in-support-of-charity/

The Business Channel is supporting Accion International for the Great Blog Off. You can make …read more

Not too long ago, I posted about the idea of using net worth to set goals for your personal finances as opposed to always being concerned about your budget.
In a guest post for Moolanomy (yes, I’ve been hitting up the guest posts pretty hard), I expound on the idea of a net worth mentality v. a budget mentality.
Which mentality do you have?

Trent, over at The Simple Dollar, has a very interesting post up regarding net worth. He looks at how to move from having a budget mentality to developing a mentality that focuses on net worth. This got me thinking about the differences between making a budget and focusing on net worth.
Budget v. net worth
While a budget can be a useful tool, it is important to note that a budget is really more about teaching yourself to be disciplined and to look seriously at your cash flow. The idea is to try an set up a system where you are living …read more

One of the best places to start out when developing a plan for yielding wealth is your net worth. Taking the time to figure your net worth is an exercise in good financial planning. Why? Because it lets you know where you are at right now. This is important. In order to plot out where you are going, you have to know where you are starting from.
The easiest way to calculate your net worth is to add you your assets and your liabilities. Then subtract your liabilities from your assets. The result is your net worth. This net worth calculator …read more