How to calculate your net worth (and what to do with the number)

ReviewedEducational article · Updated Oct 2026

Key takeaways

Net worth equals everything you own minus everything you owe.
Include assets at a realistic current value, not what you paid or hope to get.
The trend over time matters more than any single snapshot.
A negative net worth is common early in life, especially with student or mortgage debt.

Income tells you what comes in each month. Net worth tells you where you stand at a point in time. It is the simplest summary of your finances: Net worth = Assets − Liabilities.

Step 1: list your assets

Assets are things you own that have monetary value. Typical examples are:

Cash in checking and savings accounts.
Retirement accounts and investments, at current market value.
Property, such as the market value of your home.
Vehicles, at a realistic resale value rather than the purchase price.
Other valuables that you could sell, such as a business interest.

Be conservative with items that are hard to value, such as furniture or collectibles. Many people leave everyday household goods out entirely.

Step 2: list your liabilities

Liabilities are what you owe: mortgage balance, student loans, car loans, credit card balances, personal loans and any unpaid taxes or bills. Use the current outstanding principal from your latest statements.

Step 3: subtract

Here is a worked example for a hypothetical household:

Example net worth statement
Item	Amount
Checking and savings	$12,000
Retirement and investment accounts	$48,000
Home (estimated market value)	$260,000
Car (estimated resale value)	$9,000
Total assets	$329,000
Mortgage balance	$215,000
Car loan	$6,500
Student loan	$14,000
Credit card balance	$1,500
Total liabilities	$237,000
Net worth	$92,000

Notice that the house is the largest asset but also comes with the largest debt. Home equity (value minus mortgage) is $45,000 of the $92,000.

Liquid net worth

Because property and retirement accounts cannot be spent easily, some people also look at liquid net worth: cash and easily sold investments minus short-term debts. In the example, liquid assets of $12,000 minus the $1,500 card balance is $10,500, a very different picture of short-term flexibility.

Using the number sensibly

Track it, but do not obsess. Update it every quarter or every six months.
Focus on direction. Net worth rises when you save, pay down debt or assets grow, and falls when markets or property values fall.
Do not compare with others. Age, income, location and family situation make comparisons meaningless.
Negative is not a failure. Students and new homeowners often start below zero.

Ways to raise net worth

Spend less than you earn and save the difference. See the 50/30/20 rule.
Pay down high-interest debt. See snowball vs. avalanche.
Keep investment costs low. See fees and expense ratios.
Give compounding time. See how compound interest works.

Common questions

Should I include my home?

Yes, at a realistic market value, along with the mortgage. Many people track net worth both with and without their home.

How can I plan to improve it?

Set a target and use the savings goal planner to see what monthly amount reaches it. This is general education, not personal advice.

Common mistakes to avoid

Using purchase price instead of current value for cars and property.
Forgetting small debts, such as store cards or money owed to family.
Counting illiquid assets as spendable money.
Checking it daily, which turns normal market movements into stress.

Quick glossary

Asset: Something you own that has monetary value.
Liability: Money you owe.
Equity: The part of an asset you own after subtracting related debt.
Liquid assets: Assets that can quickly be converted to cash.

Try it yourself

Write down all assets and all debts today, subtract, and save the figure with the date. Repeat in three months and note what changed and why.