Do you really know where you stand financially? Many of us may think we are doing well but just how well are we really doing? Take a close look at your net worth and you will have a clear picture where you stand financially. This will be your first step in creating a financial plan.

Your net worth is your assets minus your liabilities. Preparing a net worth statement can give you several clues about areas you need to work on and what actions to take first in your financial plan.

Begin developing your net worth statement by taking inventory of your assets. Your assets include cash, investments, retirement funds, real estate, personal property, household goods and anything you on of value.

The next step is to list your liabilities. Liabilities include loans, credit card balances, taxes owed or any additional amount owed.

Now subtract you liabilities from your assets. Hopefully you are more assets than liabilities and have a positive net worth. How much net worth you should have is based on your annual income and age use this tool from CNN to compare your net worth.

Use this free net worth calculator at MSN.com.