Money Basics

Assets and Liabilities

Assets are things you own with financial value. Liabilities are amounts you owe.

4 min

Money 101 • 04

Assets and liabilities describe two sides of your financial position.

Assets are things you own with value. Liabilities are debts and other amounts you owe.

The labels are about financial position, not whether something feels good or bad.

A car can be an asset because it has value, while the car loan is a separate liability.

Common assets can include

01Cash02Savings and investments03A home04A vehicle05Other property with financial value

The other side is what you owe.

01

Assets

Things with financial value that belong to you.

02

Liabilities

Amounts you owe to lenders or others.

One purchase can create both an asset and a liability.

Car value$20,000
Car loan$15,000
Asset$20,000
Liability$15,000

Purchase price is not always current value.

Assets can rise or fall in value over time, while liabilities change as you borrow or repay.

When listing your financial position, keep the two lists separate.

01What do I own?02What is each asset worth now?03What do I owe?04What is each current balance?

Remember this

Assets are what you own. Liabilities are what you owe.

Keeping them separate makes net worth much easier to understand.

Lesson complete

Reviewed 2026-08-18

Sources

Financial Consumer Agency of CanadaChoosing a financial advisor ↗Ontario Securities Commission, GetSmarterAboutMoneyGlossary ↗
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