How Much Are You Worth?

During our financial lives we are faced with many situations where we must determine our personal value.  During these financial milestones how can we determine how much we are worth?

For some of us, the first independent financial decision we make is the limit on our first credit card. Very often, we are still in school when we apply for our first credit card, and therefore we get a student credit card.  Sometimes financial institutions have a pre determined limit that they allow for student credit cards, such as $500 or $1000.

Financial institutions require a lot of our personal information such as our annual income, our program of study, sometimes our GPA, and amount of time that we have lived at our current address.  These are all variable factors that help financial institutions determine if we are financial responsible.  This is how our financial institution determines our personal worth…in the form of a credit card limit.  Responsibility may be a factor that determines our personal worth.

After we finish college, we (hopefully) enter the work force full time.  If we are lucky enough, we find a full time career that offers employee benefits.  One of the next financial decisions we will have to make is the amount of life insurance we need to purchase. In general, with group life insurance, people choose an amount of coverage that is a multiple of our annual base salary.  How much life insurance do you have? It may be enough to cover your debts.  Or, it may be an amount that will allow your spouse to maintain his/her current lifestyle for a certain number of years.

The next step of our financial lives when we need to determine our personal worth is marriage.  Pre nuptial agreements may be the next large financial decision when we need to place a value our personal worth.  Do you have a prenuptial agreement with your spouse? If so, was it based on your net worth prior to the marriage?  Or is it a personal value?  Since I am not married, I don’t have experience in drafting a pre nuptial agreement.  However, I don’t feel that a pre nuptial agreement should not put a value on a person’s life or relationship, but instead, it should protect a person’s net worth prior to the marriage.

As successful professionals we now often determine our personal value by our personal Net Worth. I definitely don’t agree that our personal net worth determines our personal value. However, many young professionals and seasoned successful professionals determine their personal value by their bottom line.

How do you value your worth?

(Photo by Sylvar)

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• Thoughts on Properly Doing a Prenup
• Graph Your Net Worth