Money Tips » How to Be A Zeronaire

Who wants to be a millionaire? We all do. The first step on that glittering path is becoming a Zeronaire – the magic Zero being the amount you owe. That's right – be a Zeronaire and you owe zilch; all your money belongs to you and it's the perfect launchpad for your upcoming millionaire/financially sorted status. Imagine the freedom you would have if you owned nothing to anyone. What could you do? What choices could you make? Where could you go?
So you want to sort out your money and become a Zeronaire. That's a fine goal and this whole site is here to help you get right where you want to be. First, though, you've gotta work out right where you are. Not where you live, not your geographical location, but where you are with your money. Because how much use is the best map in the world, if you don't know where you are on it? As much use as a chocolate hat on a sunny day, that's how useful. To get exactly where you're heading for in your wildest dreams of financial freedom, start where you're at. In other words, calculate your Net Worth. Your Net Worth is basically the difference between what you own (Assets) compared to what you owe (Liabilities). Are you deep in debt doo-doo, or actually not doing so badly thankyou very much? It gives you a far more balanced and realistic snapshot of your actual situation than simply focussing on your debts, which makes even the most lion-hearted of people want to run screaming for the hills or drowning themselves in vodka.
 
• If you own £1k worth of stuff/assets but owe £3k of debt/liabilities, then your Net Worth is the calculation between those two figures: -£2k.
• Or, if you own £3k worth of stuff/Assets and owe £1k of debt/liabilities, then that means your Net Worth is….go on, you can do it…+£2k.
 
Let's have a look at yours now.
 
1. What do you owe to other people/banks/places? Include your overdraft ('cause it's actually real live debt, not just a buffer zone!), student loan (this, amazingly enough, is also debt), credit card debts, loans, store cards, what you owe to your parents and other people. Don't class your mortgage or pension, if you've got them, and don't count regular bills like electricity. Long term bills like hire purchase, catalogue bills etc do count though.
 
2.Wanna feel a bit better about things? Ok, let's look at what you've got. Count everything you own, savings, money under the bed, your coin jar, your piggy bank, how much you'd get if you sold your car, what you'd get from your CD's and DVDs if you flogged them on E-Bay (so think of the realistic E-bay price, not the top value you actually paid for them yourself). Anything you could sell, or, in finance-speak 'liquidise'. If you've got a house, don't count your mortgage but the capital you've got in your house i.e the difference between your mortgage and what you'd what you'd actually get realistically if you sold your house today.
 
See? That's hopefully a bit more reassuring. That knowledge gives you power. And don't worry, we're not actually telling you to liquidate your assets and sell all your favourite stuff. Just knowing what you've got  and how much money it could potentially get you can make you feel more confident in dealing with your money – you have shown some sense and not been a total waster, after all. It can also make you more poised and choosy in your future purchases too, 'cause you start thinking more like an investor and less like a shopping fiend…
 
3. Now use our nifty tool to calculate the difference between your debts and your lovely shiny possessions, and bingo! There you go, you've got your Net Worth. And from that clear starting place you know exactly where you are on the map and can proceed to greater things (like Zeronaire status!) with confidence.