Experts often ask how long you can afford not to completely understand what you have and what you need to map and manage your life’s goals.

Regularly calculating your net worth the difference between your overall assets and liabilities, helps chart your financial progress.

“It’s valuable when you are looking at your long-range goals and when you are looking toward retirement,” said Pamela Christensen, a certified financial planner in Roseville, Calif.

One of her clients, Heidi Miles of Folsom, Calif., determines her net worth every December, although some experts suggest waiting until January, when data from annual statements such as retirement plans and mortgage balances are in. Miles, who divorced five years ago, said that knowing her net worth is important so she can protect her assets and know her future income needs.

Here’s how it works:

Basically, everything you own is an asset, including cash in your checking or money market accounts, savings bonds, equity in pension plans and balance in your individual retirement accounts or other retirement plans. Don’t forget the cash value of whole-life insurance policies.

You should add the full market value of your home and any automobiles, even your furniture, jewelry, or money other people owe you.

Then determine your liabilities, from auto and student loans to credit card balances and home mortgages. In short, any debt is a liability.

Worksheets make the task easier.

You can find a good one at www.kiplinger.com/tools/networth.html. It does the addition and subtraction for you.

Kevin McCormally, editorial director of Kiplinger Personal Finance magazine in Washington, D.C., urges consumers not to feel discouraged when they first realize their net worth.

“If you just bought a house and you have a big mortgage, it’s not something to get upset about. “It’s the direction, the trend” of your net worth that is most important.

While Miles of Folsom said she has long been familiar with the value of a net worth statement, the majority of Christensen’s new clients are not.

Once they figure it out, the best approach is to combine that knowledge with a plan to manage assets for the coming year.

Ultimately, that means devising a strategy to minimize reliance on credit cards.

And once you have control over your finances, credit card use becomes a financial option instead of a survival technique.

To Christensen, it’s all about knowing when and how to make a sacrifice. Should you sacrifice tomorrow for what you want today? Or, she asks, can you sacrifice today in order to achieve your goals for tomorrow?