Your sheet and all the financial tools you have are useful to understanding your net worth, but what are your liabilities?
The general picture
Your liabilities, put simply, are what you owe. In order to know your net worth, you need to know all your liabilities and subtract them from your assets. The result will be your net worth.
They might sound like something bad or harmful, but they aren’t as long as you keep track of what you owe and manage it responsibly. The money you owe can be short or long-term. Your short-term liabilities might be your credit card balance or your bills due for the current month. Your long-term liabilities could be your mortgage, personal loans, or even your credit card balance if you haven’t paid it in full every month.
These are important because if you begin to know and understand where you are making mistakes, you can then start working on your financial planning to more successfully reach your financial goals.