How do I calculate my net worth?

How to Calculate Your Net Worth

Understanding your net worth is a crucial step in assessing your financial health. By subtracting liabilities from assets, you can determine where you stand financially and track your progress over time.

Identifying Your Assets

Assets are everything you own that has value. Once you’ve listed all your assets, total their value to get a comprehensive picture of what you own. These include:

Bank Accounts: Checking and savings accounts.
Investment Accounts: Retirement accounts like 401(k)s and IRAs, as well as brokerage accounts.
Real Estate: Primary residence, rental properties, and any other real estate investments.
Personal Property: Vehicles, jewelry, valuable collectibles, and other tangible assets.
Business Interests: Any ownership in a business.

Calculating Your Liabilities

Liabilities are debts or financial obligations. These include:

Mortgages: The remaining balance on any home loans.
Car Loans: Outstanding auto financing.
Student Loans: Education-related debt.
Credit Card Debt: Unpaid balances on credit cards.
Other Debts: Personal loans or any other financial obligations.

Understanding Your Net Worth

After totaling all liabilities, subtract this number from your total assets. The result of this calculation is your net worth.

A positive net worth indicates financial growth and stability.
A negative net worth is common in early adulthood, often due to student loans and other initial debts, but can improve with time and proper financial planning.

Why Tracking Net Worth Is Important

Regularly monitoring your net worth helps track financial progress, set realistic financial goals, and make informed decisions about saving, investing, and debt repayment. Whether working toward wealth-building or financial independence, knowing this will help provide a clear snapshot of where you stand and where you’re headed.

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Shawna Theriault, CFP®, CPA, CDFA®
Senior Financial Advisor, Wiser Wealth Management

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