Net Worth Calculator
Assets
Liabilities
How to Calculate Net Worth
Net worth is one of the most important indicators of your overall financial health. Whether you’re planning for retirement, evaluating investment opportunities, or just curious about your financial standing, knowing how to calculate your net worth can give you valuable insights.
What Is Net Worth
In simple terms, net worth is the total value of what you own (assets) minus what you owe (liabilities). Think of it as your personal balance sheet. It gives you a snapshot of your current financial position and helps track your progress over time.
Why Net Worth Matters
- Tracks financial progress: Measuring net worth regularly helps you see if you’re moving in the right direction.
- Supports goal setting: Whether saving for a house or retirement, knowing your net worth helps set realistic goals.
- Guides financial decisions: It helps you determine if you’re ready for big investments or need to cut back on debt.
How to Calculate Your Net Worth in 4 Simple Steps
Step 1: List All Your Assets
Assets are anything you own that has value. Common examples include:
- Cash and bank account balances (savings, checking)
- Investments (stocks, bonds, mutual funds)
- Retirement accounts (401(k), IRA)
- Real estate (current market value of your home)
- Vehicles (cars, motorcycles, boats)
- Personal property (valuable jewelry, collectibles, etc.)
Total Assets = Sum of all these values
Step 2: List All Your Liabilities
Liabilities are debts or obligations you owe. These can include:
- Mortgage balance
- Student loans
- Credit card debt
- Auto loans
- Personal loans
- Any other outstanding debts
Total Liabilities = Sum of all your debts
Step 3: Subtract Liabilities from Assets
Now, use the formula:
Net Worth = Total Assets – Total Liabilities
Step 4: Track It Regularly
Calculating your net worth once is useful, but doing it monthly or quarterly can help you identify trends and improve your financial habits over time.
Example of Net Worth Calculation
Let’s say you have the following:
- Assets:
- Bank accounts: $10,000
- Investments: $25,000
- Home value: $300,000
- Car: $15,000
- Total assets = $350,000
- Liabilities:
- Mortgage balance: $220,000
- Credit card debt: $5,000
- Auto loan: $10,000
- Total liabilities = $235,000
Net Worth = $350,000 – $235,000 = $115,000
Your net worth isn’t just a number; it’s a financial snapshot that reflects your money habits, choices, and progress. By understanding how to calculate and monitor it, you can take control of your financial journey and make smarter, more informed decisions.