what do you
have in
your
house?
assets, liabilities and net
worth
This paper is part of a series linked to Your Money and
Your Life by Keith Tondeur and Steve Pierce. Visit
www.stewardship.org.uk/ymyl for further information
Stewardship 1 Lamb’s Passage, London EC1Y 8AB
t 020 8502 8585 e [email protected] w www.stewardship.org.uk/money
introduction
A widow came before Elisha in despair and crying out for justice (2 Kings 4:1-7). A creditor had taken her
two children in payment of debts. Elisha asks her, ‘what do you have in your house?’. This Stewardship
information paper explores what it means to have assets and liabilities and offers a simple tool for listing
these things and calculating our ‘net worth’.
beyond the budget
The first step in taking control of money and starting on the journey to financial freedom is to create a
realistic budget, something that you can really live with. It is possible to live on a very tight budget for
some time if, for example, you are paying off debts or saving for a specific purpose. But long-term you
need a budget you can live on and engage properly with other people.1
However, a budget only deals with cash coming in and cash going out, what we call income and
expenditure but our finances are about more than just cash. We have assets and we have liabilities and
when we subtract the one from the other we are left with what is called our ‘net worth’.
cash in the attic
Assets are those things that we own that have some
monetary value if we decided to sell them or dispose of
them. What things might qualify as assets?

Obviously any cash we have saved in a bank or a
building society is an asset. Assets also include things like
shares or investments, although these things fluctuate in
value so it is harder to say exactly how much they are
worth.

The more major items such as a home, a car, a
timeshare in the Bahamas or a caravan in Prestatyn.

Also ‘collectible’ or ‘personal’ items’. This might include
paintings, stamp collections, jewellery and so on. TV
shows such as ‘Cash in the Attic’ demonstrate just how
much of an asset some of that old junk we have really is!
In theory anything we own is technically an asset but when it comes to calculating the value of an asset
we have to ask two questions. Firstly, is it something we could really get by without owning? A new £300
washing machine is an asset but we need it day-to-day so it is not really saleable. Secondly, does it have
any real value if it was sold and would someone readily want to buy it? It often helps to only count as
assets things worth more than a set amount,£250, £400 or more.
1
Visit www.stewardship.org.uk/budgetbuilder for an easy to use online tool to help plan a budget. Visit the resource library at
www.stewardship.org.uk/money and use the ‘budget’ link to read more about budgeting from a practical and biblical perspective
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liabilities
Anything we owe to other people, anything that is no fully ‘ours’ is what we mean by a ‘liability’. The
most obvious liability is money that we owe to others. This would include credit card debts, any
outstanding loans, such as a car loan, and anything we have borrowed from family and friends.
Liabilities also include a mortgage. However large or small our mortgage might be and however much
the market price of the house might be a mortgage is a liability until it is paid off in full.
Finally, liabilities can be money we owe in income tax or council tax arrears, money we owe to the gas or
electricity companies or even court fines we are paying off over time.
net worth
The final step is to subtract what we owe to others (our liabilities) from what we have (our assets) to
calculate what is called our ‘net worth’. A simple example will help.
I own a car for which I paid £5,000 using a personal loan. In theory the car is worth £5,000 and I owe
the bank £5,000 so if I subtract my liability from my asset my net worth is £zero. But, of course, the car
depreciated in value the moment I drove it off the garage forecourt! Although I owe £5000 the car is
worth just £4,000 because that is all I would get for it if I sold it. In this case my net worth is negative by
£1000. I have an asset of £4000 and a liability of £5000.
However, I was expecting to pay more for the car than £5000 so in the building society I have a total of
£2000 of savings which I did not need for the car. So when I include the £2000 savings my net worth
moves from a negative £1000 to a positive £1000.
recording our assets and liabilities
At the end of this paper there is a simple table for recording assets and liabilities. If you are taking control
of your debts this ‘assets and liabilities statement’ is a discipline for recording your total debts. This is
never pleasant and the thought of it can be very off-putting but it is essential. An assets and liabilities
statement also helps in identifying what we have which is of monetary value and could be sold to pay off
some of the debts. One couple agreed to sell their car and buy a smaller one. It was the husband’s pride
and joy and they took a hit on paying off the loan early but it made such a big dent in the money they
owed they felt it was worth it. If you are dealing with debts or are anxious about your levels of borrowing:

It is vitally important that you list the total amount of each and every liability that you owe: credit
cards, hire purchase, credit union loans, store cards, borrowing from family and so on.

List at the very least the minimum payments on each debt or list the higher payment you are currently
making. Make sure your budget includes all required minimum payments on each debt.
getting financially fit
Of course, you may not be dealing with debt but simply want to take control of your financial situation.
An assets and liabilities statement is an important tool to help us do just that. Just as we might step on
the bathroom scales to see how we are doing in fighting the flab, so calculating our net worth gives a
snapshot of our financial situation today and helps us see our progress, or otherwise.
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As a rule of thumb it is worth calculating your net worth once a year and perhaps also before making a
significant purchase or when facing a major change in personal circumstances. For some people it is
helpful to make an increase in net worth one of their financial goals. You may want to set some limits,
such as negative net worth not exceeding six months salary or a certain positive net worth triggering a
decision to give a lump sum to church or charity or, where appropriate, to relatives.
Remember that the calculation itself is of little value. It matters only for what it means to us and the
lifestyle choices that we make. Having negative net worth may be understandable given your situation.
What matters is whether the trend is in the right direction. If the situation is getting worse then you may
need to take action. Likewise, a healthy net worth, as a rich farmer learned to his lasting discomfort (Luke
12:13-21), is not a licence to spend more but should lead to a careful consideration of future planning
and of greater giving.
We must also remember that our net worth will naturally change over time with the normal cycle of life. If
we are just starting out we may have few liabilities in terms of mortgage or other borrowing but also little
in the way of assets either. A young family buying a new home gains a large asset and a step on the
property ladder but also incurs a large liability. This is not only a financial liability; a house brings with it
maintenance and improvements which cost time, money and energy.
treasure in heaven
A story is told of the wealthy Victorian Jewish gentleman Moses Montefiore. When asked how much he
was worth he thought for a moment and then gave a figure. His questioner said that surely he was worth
more than that. ‘Ah’, said Montefiore , ‘you did not ask me how much I owned but how much I was
worth. To answer your question I was calculating how much I had given to charity this year’.
Our real net worth is not on our balance sheet but in our giving, not stored in the bank but in heaven. As
Christians we are in the business of building God’s kingdom not of accumulating an ever growing
portfolio of assets.
the power to get wealth
As ever when it comes to money we need to be aware of the temptations. Deuteronomy 8 reminds us
how the very blessing of God’s gift of wealth is a temptation to self-assured forgetfulness of God as the
giver of all we have. It can be encouraging to watch our liabilities decrease, assets increase and our net
worth rise over time but, “do not say to yourself, ‘my power and the might of my hand have gained me
this wealth’. Remember the Lord you God for it is he who gives you power to get wealth” (Dt 8:17-18).
We need to be careful that the tail does not start wagging the dog. An assets and liabilities statement is
simply a tool for helping us exercise our stewardship responsibilities before God, to assess the quality of
our lifestyle choices, the opportunities that financial freedom gives us to serve the Lord Jesus and most
crucial of all, to be generous in our giving. If increasing our net worth becomes the focus of what we do
then we have taken our eye off the ball.
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surrendering it all to God
To avoid this danger it is really helpful to take seriously the
final “surrender to God” clause at the end of the assets and
liabilities statement. Everything we have is a gift from God;
he is the ultimate owner of all things (Psalm 24:1; 1
Chronicles 29:10-14; Haggai 2:8) and it is important that
we acknowledge this important spiritual perspective when
we create or review our financial assets and liabilities.
Once the assets and liabilities statement has been
completed take some time to give thanks to God for what
he has entrusted to you. Then, when you are ready, sign
and date the surrender to God declaration. Spiritually this is
a very significant step on our journey to faithful stewardship.
It can be hard at first; it is not easy to let go of our
ownership of some things. In fact it can be like peeling the layers of an onion. We think we have let go of
things only to find that this does not include our car, jewellery or our sense of entitlement to exotic
holidays! But signing the surrender to God clause can be drawing a spiritual line in the sand which
somehow subtly changes and transforms our relationship to our money and our possessions.
conclusion
When Abraham left the city of Ur to travel to the promised land the bible tells us that he was a wealthy
man and when he left the city he took it all with him. He remained a wealthy man through his life and
doubtless his list of assets and liabilities showed a very positive net worth!
Yet Abraham shows his freedom from the trappings of wealth when he and his nephew Lot agreed to go
their separate ways and Abraham allowed Lot to make the first choice – and to choose the best land.
We may not have Abraham’s wealth but we should all seek Abraham’s freedom around money.
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statement of assets and liabilities
assets
assets
market
value
assets
market
value
home
shares/investments
car/motorbike/bicycle
cash value of life insurance/endowment
caravan/second home/time-share
collectables, e.g. stamps/coins/pictures
computer/printer/laptop
jewellery
furniture
pension plan
consumer goods, e.g. TV
other assets 1
cash savings
other assets 2
total
total
grand total
liabilities
liabilities
amount owed
minimum payment2
mortgage
utility arrears debts
income tax/national insurance
council tax arrears
credit/hire-purchase arrangements
credit cards
store cards
overdrafts
credit union loans
loans
personal debts – family and friends
other ‘secured’ loans
other ‘unsecured’ loans
total
net worth – total assets less total
liabilities
List at the very least the minimum payments on each debt or the higher payment you are currently making. Make
sure your budget includes all required minimum payments on each debt
2
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surrendering to God
On [insert date:
] I surrender to God the ownership of all my assets and
no longer claim them as my own. I hold them in trust from God to be enjoyed fully and shared
generously.
I acknowledge my liabilities, trust God’s provision for them and commit to working towards reducing my
debts and living a sustainable lifestyle.
Signed
__________________________________________
dated _______________________
(Steward of the above)3
3
An editable electronic copy of the assets and liabilities statement is available on the Stewardship website in both
Word and Excel formats. You may wish to customise this form and include additional signatories, for example for a
married couple, an extended family or several adults sharing a home together.
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