The first step in the analysis is to determine the net worth. This is a summary of their spending and saving habits. It shows the cumulative effect of their financial decisions. It not only shows how they are doing, but also gives clues to potential changes to improve their financial future.

In simple terms, their net worth is the difference between what people owe and what people own. If people come out owning more than people owe, people have a positive net worth. If the opposite is true, people have a negative net worth. Net worth statements have common categories of assets and debts. Debts are generally divided into two categories: secured and unsecured. Assets are generally divided into the following categories: