I let the end of the year slip by wihout raising one of my favorite subjects: the need to keep track of your financial situation. But it isn't too late, so here goes.

You should sit down once a year and draw up a balance sheet of your assets and liabilities. The first of the year is a good time; but if the excitement of the holiday season makes it a difficult period for paperwork, pick any other date that's convenient.

You might prefer making the inventory in conjunction with annual preparation of your income tax return, when you have your financial records out anyway.

The date you select is not important. What is important is that you prepare such an accounting at least on an annual basis. Also important: If you're married, husband and wife should work on the project together.

Your balance sheet (good title for a column?) need not be elaborate. You need nothing more than a list of what you own (assets or resources), what you owe (liabilities), and the difference between them (net worth).

What you elect to include or exclude is a matter of personal judgment. There are no rules, but here are some guidelines you might find useful.

Start with cash assets like savings accounts, certificates of deposit and money market fund shares (plus any $100 bills stuffed in the mattress, if that's where you keep them).

Unless you keep a large surplus in your checking account, don't include that balance. For most people that's a fluctuating amount used only for the payment of current expenses.

List your stocks, bonds and mutual fund shares, at market value on the inventory date. (If you also show your cost, this exercise offers a convenient opportunity to consider sale of any "dogs" you've been holding.)

Don't include furniture, clothing or most jewelry. Although these are assets, they are not "resources" for most people, since they would not normally be sold to generate cash. But do list any particularly expensive items of jewelry that might well be considered investments.

The same reasoning applies to art objects like paintings, etchings or sculpture. They're normally personal belongings but should be in your inventory if they are of investment quality.

Do include your home or other real estate. List these on the asset side at net market value--that is, estimated sales price less selling expenses. Don't subtract the mortgage; instead, include the current mortgage balance as a liability.

Since you're not counting the money in your checking account, you should also omit any credit card balance that you expect to pay in the current month. But list any amount that you'll be paying off over a period of time, along with the current balance on notes like a loan for a car or furniture.

You should also count as an asset the cash value of any permanent plan of life insurance you have (minus any outstanding policy loan). Also add the vested amount of your company pension plan, and the present value of all IRA and Keogh accounts.

Finally--the catch-all--put down anything else of significant value: Assets such as a stamp collection, gold coins or a vintage auto, liabilities like an education loan or home improvement loan.

When you've finished listing all your assets and liabilities, the difference between them is your net worth. Of course, if liabilities are greater than assets you have a deficit--and maybe a little trouble along with it.

If you keep these balance sheets from year to year, you can get a pretty good picture of what's happening in your financial life. Your net worth should increase each year; but by how much depends on your individual circumstances.

For example, if you're already retired and have enough income to maintain a comfortable standard of living, then it may be enough for the annual increase simply to compensate for any inflation-generated rise in the cost of living.

If you're still working and are covered by a good and safe retirement plan, then you also may not need to do much more than keep up with the cost of living.

But if you're self-employed or are not covered by an adequate pension plan where you work, then your net worth should be growing enough each year (over the inflation rate) to build a capital base to produce income after retirement.

What you shoot for each year is a purely personal decision. These general examples should give you an idea of how to measure your own progress. The important point is that it takes a periodic inventory to answer the question "How'm I doin'?"