Very simply put, Net Worth=Assets-Liabilities. Assets are things such as cash on hand, money in the bank, property, vehicles, etc. Liabilities are all variety of debts, such as student loans, credit cards, consumer debt.
For example, if you have $1000 in Assets, and $600 in Liabilities, your Net Worth would be +$400. Likewise, if your Liabilities were $1000 and Assets were $600, your Net Worth would be -$400. I’m sure we all agree that having a positive number is the better alternative.
My personal Net Worth is well below $0, which is rapidly becoming a highly unpleasant scenario for me as the interest is adding up quicker than I am able to make payments. My debt is primarily related to being a student, and some would consider that to be “good” debt, but I can no longer console myself with that as I am unable to make even the minimum payments on the balances.
Friends and Family | $2506.63 |
Student Line of Credit | $8715.87 |
Student Loan | $25000.00 |
Student Loans @ Collection Agencies | $11440.41 |
Student Loan | $1669.89 |
Dental | $1691.82 |
Miscellaneous | $923.93 |
$51948.55 |
Above is a breakdown of what I owe various entities. “Friends and Family” include $440 to an ex-boyfriend for the parts for fixing my car, my son to whom I owe slightly more than $1500 for use of his credit card for a few months, and an additional $570 remains owing to babysitters for childcare nearly two years ago. What you can’t see here is all the times I’ve “borrowed” from my mother, and by “borrow” I mean “borrowed against my inheritance.”
The student line of credit was borrowed from a major financial institution during my last year of nursing school, it was $11, 000 and helped us out tremendously! I am making regular payments on this plus a small extra payment in an effort to eliminate this source of debt.
$25000 is my primary student loan from the government for university and reflects the bursaries that were received from the government programs following completion of each year of schooling. $4500 some years, $3400 in other years, so this number is not as high as it potentially could have been.
The following two are student loans from 1998, which is when I attended a career college for 10 months. These loans are currently in the possession of a collection agency, collecting interest as we speak. I have been unable to make payments since 2000, and I am actually a bit unsure of where to be making payments.
“Dental” is an accumulation of various dental work I and my children have had over the years; initially I made regular monthly payments but now I’m not even making interest payments.
Miscellaneous includes parking tickets, and an old phone bill from a company I no longer deal with.
All of the payments that I am making toward eliminating my debt load are being made via online banking, which is scandalously convenient. I’ve got the system all set up to transfer funds several days after each payday. Its been working since January of this year, without one payment being NSF. This is an accomplishment in itself for me!
If I were able to set up the remaining debtors in the same way, I would certainly do so, but not every collection agency or dental group is so easily accessible. In the meantime, I am awaiting the arrival of check blanks, which will allow me to begin making regular payments to the dental group.
It is not my intention to walk away from any of this debt. It is my procrastination coupled with a paycheque that is never large enough that has caused this situation.
In order to be eligible for a mortgage at some point, I am going to have to fix this situation.
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