Learn How to Calculate Your Net Worth

Learn How to Calculate Your Net Worth

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What is net worth and how do you calculate it? Knowing your net worth can be an extremely useful finance tool as you monitor your financial health and progress year after year. Net worth is essentially tallying up everything you own (assets) and subtracting everything you owe (liabilities). After this simple calculation, you’re left with your net worth.

People often refer to net worth as a financial snapshot. It’s just a picture of a moment in time. It’s not a projection of what you think you’re going to be worth in the future. You don’t add in your future salary, raises, or even pensions. Net worth is just a calculation of what you own and owe, right here, right now. Learn how to calculate your net worth and start tracking it today.

How to Calculate Your Net Worth

Calculating your net worth is actually really easy. I promise. I know I didn’t warn you that math would be involved, but I promise its very simple. I’ve also created a FREE Net Worth Calculator Template that will do the simple net worth calculations for you.

When you’re calculating your net worth, what you’re actually doing is creating a personal balance sheet, similar to what companies and organizations use to track their own growth and net worth.

Assets – Liabilities = Net Worth

  1. On your balance sheet, under assets, you will list everything you own.
  2. Next, under liabilities, list anything you owe. (We’ll dig a little deeper below as to some examples of assets and liabilities.)
  3. Finally, subtract the total liabilities from your total assets.
  4. Congratulations! Now you know how to calculate your net worth!


An asset is really anything that can be converted into cash. When you’re listing out all your assets use the most current statement you have for your accounts. If you have houses or vehicles you’d like to list as assets, use a source like Zillow or Kelly Blue Book to look up the current resale value of your asset. Use these sources as a guide to estimates the value of these types of assets. I know you’re proud of your house or your truck, but it won’t do you any good to listed an inflated value on your balance sheet.

Examples of Common Assets

  • Checking/Savings Accounts
  • Retirement Accounts (TSP, 401(k), 403(b), IRA)
  • Investment Accounts
  • Treasury Bonds, CDs, Pirate’s Gold
  • Primary homes, rental houses
  • *Vehicles, boats, motorcycles
  • **Other High-Value Items

*Some people choose to include vehicles as assets in their net worth calculation to offset the costs of carrying a vehicle loan. I personally don’t include vehicles as assets in my net worth calculations. For me personally, they’re too tricky to track accurately especially since their value is constantly changing.

**It starts to get exciting listing all the things you own and that have value. Keep in mind, for an asset to go on your personal balance sheet you should know you could most likely sell it or would be willing to part with it. For that reason, I keep items like my engagement ring, artwork, china, furniture, etc off my balance sheet, even though I recognize they might be a nice asset and it might be valuable. I’d like to know my net worth without adding in my most valued treasures.


Not as fun…listing out all your liabilities or financial obligations or debts. Also keep in mind that some assets double as a liability if you owe money on them. Houses and vehicles are perfect examples. Again, use your most recent statements to figure out what you owe on each of your liabilities.

Examples of Common Liabilities

  • Mortgages
  • Student Loans
  • Credit Cards
  • Vehicle Loans
  • Personal Loans
  • Medical Bills
  • Any other debt/loan/item that you don’t own outright (like that brand new iPhone you might be reading this on)

Net Worth

Remember, if you sold off or cashed in on all your assets and paid off all your debts, you’re left with net worth.

Your net worth can be positive or negative. Even if you feel like you’re doing well financially, you might be unhappily surprised to calculate your net worth and find out that it’s actually negative! Don’t get discouraged. Now that you know your number, you can work on building up those assets, paying down those liabilities, and flipping that net worth figure to the positive.

It sounds cliche, but there’s not a generic net worth number that you need to have by a certain age. Everyone’s situation is different. Calculate your net worth, evaluate your situations, then set a goal to where you’d like to see your net worth in a year, five years, or even twenty.

Why Is Tracking Net Worth Important?

Think of your net worth like taking a financial selfie. Since it’s just a snapshot of your finances at a moment in time, it’s important to calculate net worth and track your progress over time, monthly or annually.

Since net worth helps you look at your financial health as a whole, it’s a great tool to help you more clearly see the big picture view of your finances and how they are trending. It’s easy to push your debts out of sight, especially when some of them have long horizons, like a mortgage for example. Tracking your net worth and having a clear picture of your assets and liabilities can really demonstrate how debt can affect your overall financial health.

You can track your net worth easily with a simple Excel sheet or check out this template I made for you. If you’re not an Excel Geek (unfortunate) and you’d rather put your net worth tracking on auto-pilot, my favorites are Personal Capital or The Mint might be a good choice for you

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