New Year’s Day is a great time to look back and look forward. When seeing where you stand and where you want to go, include – and be honest about – your finances.

To make and keep resolutions that translates into a more financially stable 2010, it’s important to know which concrete steps you can take to begin the process of financial improvement.

Part One: Tally Up Your Assets

At this point in the game, don’t fret about the little things – trying to determine the value of all your possessions is probably more trouble than it’s worth. So focus on your major assets, including:

• Real estate: Estimate conservatively the equity you have in any properties.
• Retirement accounts: Get a current value for any savings you have for your golden years.
• Savings accounts: Check with your bank for an updated total.
• Vehicles: Estimate conservatively (or check this year’s Blue Book to learn) the values for any cars or recreational vehicles you own.

This side of the equation gives you an idea of what you have to work with, so to speak.

Part Two: Tally Up Your Debts

This may seem painful, but the only way to develop an effective plan for eliminating debt is to know exactly how much you’re starting with. Liabilities could include any of the following:

• Mortgages: How much do you owe on your primary (and, if applicable, secondary) mortgage?
• Credit cards: Review your most recent statements for a solid number.
• Educational loans: Again, a current bill should reveal your obligation.
• Business debt
• Car leases or loans: Review the terms of your contract or loan agreement if necessary.
• Personal debts: Any individual who has loaned you money should also appear on this list.

After working through this from memory, you may want to pull a copy of your credit report (available free at annualcreditreport.com) to make sure you haven’t missed anything.

The Big Financial Picture

Once you know all your assets and debts, take a clean sheet of paper (or spreadsheet) and divide it into two columns. In one, list debts (with amount owed, interest rate, and any pertinent details). In the other, organize your assets.

Once you have a visual of where you stand financially, it will be much easier to make a plan for getting your finances into shape so they can outrun bankruptcy.

Here’s to a happy and financially healthy 2010! Cheers!

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