How to Calculate Net Worth
Net worth is the difference between what you own and what you owe. It provides the clearest single snapshot of your financial health.
The Formula
Net Worth = Total Assets - Total LiabilitiesWhere:
NWNet Worth — Your overall financial position valueAssetsTotal Assets — Everything you own of valueLiabilitiesTotal Liabilities — All debts and obligations owedStep-by-Step Example
Here's how to calculate net worth step by step:
- 1List all assets: Add up cash, investments, property, vehicles, and other valuables.
- 2List all liabilities: Add up mortgages, student loans, credit card debt, and other obligations.
- 3Subtract: Subtract total liabilities from total assets to get your net worth.
Following these 3 steps gives you the final net worth value.
Skip the Math
If you have $250,000 in assets (home, car, savings) and $150,000 in liabilities (mortgage, loans), your net worth is $100,000.
Use the Free CalculatorWhy You Need This Calculation
- Tracking net worth over time gives you a clear picture of your financial progress and overall health.
Common Mistakes
Overvaluing personal property like cars.
Use current market value, not what you paid for depreciating assets.
Forgetting to include all debts.
Include every liability from credit cards to personal loans.
Checking net worth too frequently.
Review quarterly or annually to see meaningful trends.