To plan effectively, you need to know where you stand. The first step in that process is to calculate something called your "net worth."

There are many reasons to figure out your net worth, said Elissa Buie, a financial planner with Capitol Financial Consultants Inc. in Vienna. For example, lenders may want it if you apply for a loan. But the best reason is the picture it gives you of your financial standing -- and by recomputing the figure periodically, you can monitor your progress.

Buie advises setting goals for yourself, such as 10 percent annual growth or inflation plus 5 percent a year.

The calculations are relatively easy.

"Net worth" technically is the amount by which the value of the things you own exceeds the debts you owe -- the excess of assets over liabilities. Put simply, this means if you sold everything you own and paid off everything you owe, what would you have left? That leftover number is your net worth.

It is quite possible, though obviously not desirable, for this number to be negative. All too many families today live from paycheck to paycheck, running a steep credit card balance, and accumulating little in the way of assets that hold their value or appreciate.

A negative or very low net worth is a clear danger signal, particularly for an older person or family. Few planners expect people in their twenties, who may still be paying off education loans and setting up their households, to be able to spare much money for investing. But as time passes and -- if all goes well -- income rises, an investing program should begin.

By middle age, if a family expects to achieve such goals as paying for their children's college and providing for their own retirement, it should be building a base of assets adequate to the task. The work sheet -- supplied by Capitol Financial Consultants -- shows you what, if anything, you have to build on.

Assets Cash and cash equivalents: This one is easy -- it's money in the bank (or the money market fund). Include certificates of deposit and money market mutual fund shares, money that is easily accessible and can be withdrawn or redeemed at face value. The value is whatever the balance is, or was as of the last interest payment.

Invested assets: Insurance and annuities are meant to pay a lump sum or begin a stream of payments at a specified point, such as when you die or when you reach age 65. Most, but not all, insurance and annuity contracts have a "cash value," which the company agrees to pay you if you surrender the policy. You may be able to tell what this is from documents you have, but most likely you will need the help of the agent who sold you the policy.

Bonds and fixed-income mutual funds other than money market accounts fluctuate in value, depending on market conditions. Your latest brokerage statement ought to have a current value for any bonds you own, or your broker can get one for you. Mutual fund values are quoted daily in most newspapers. Multiply the net asset value (NAV in the quotations) by the number of shares you have.

Most individual stocks and equity mutual funds are quoted in the newspapers, though you may have to call your broker if you hold shares of a small, thinly traded company. Include shares in closely held businesses under "business interests."

If you have an individual retirement account, you should receive regular statements from the trustee. You may use the value on the latest statement, or if it involves stocks, bonds, mutual funds or some other asset whose value is available, figure a more current number.

Valuing your pension may require help from your company benefits office. If you have a defined contribution plan, such as a 401(k) plan, you may be able to take the value off of a recent statement, but valuing a defined benefit plan -- a traditional pension that pays benefits based on your wages and time on the job -- is something for the benefits office.

Some planners prefer to list your residence under personal assets. Arguments can be made both ways. But for most people, their home is their biggest asset, and there are ways to tap its value if you have to.

Most people around Washington know the value of their homes to the nearest penny, but if you don't, a recent tax assessment will give you a reasonable value. It may be low, but it doesn't hurt to be conservative.

Business interests and limited partnership units are difficult to value. If you own a business, you may have a good idea of its value; otherwise estimate. Remember that many limited partnership interests are worth only a fraction of what they originally sold for.

Hard assets are also tough to value. Ads in trade publications may help, as may dealers, but take these values with a grain of salt.

Are there other assets that don't fit any of the previous categories? Own a gas lease in Louisiana? Timber rights in Oregon? Are there assets in trust that will be distributed to you in a few years? Anything that has the characteristics of an investment and has real value should be included here.

Liabilities Invested assets: These are loans or other debt on your investments that would be paid off if the asset were liquidated.

If you buy stocks on margin (borrowed money), enter how much you owe.

For your home mortgage, use the outstanding principal balance -- the amount you would have to pay to pay off the debt. Include second and third mortgages, and any other mortgages you have. Also include a home equity loan if you have one.

On other real estate, use the outstanding principal balance of all loans secured by the property. Likewise, borrowings from your life insurance, retirement plans and any business loans you may have should be listed by the balance owed.

Personal assets: These are the debts we are all familiar with -- your Visa account, your department store accounts, installment plan loans for such things as furniture. If you pay off your credit card balances monthly, you may wish to carry this as zero, but if the amount is substantial, adjust the cash entry in your asset list.

Car and boat loans, like mortgages, should be listed by outstanding balance. The same is true of personal loans, such as student loans and the like.