There are a lot of important numbers when it comes to your money: your checking account balance, how much you have stashed in your retirement account or maybe your credit score. Another important number that you should know: your net worth. It’s important to know your number because it’s an indicator of your overall financial health. So, you may be wondering, “how do I calculate my net worth?”


Net worth is the difference between your assets and liabilities. Your assets are anything you own that has monetary value. “Liabilities,” on the other hand, are debts that you owe. Put simply, your net worth is what you owe subtracted from what you own.


To determine your personal net worth, first tally up the value of your assets. This includes everything in your checking, savings, retirement and investment accounts, as well as the current market value of your home, car or anything else of value.

Next, add up your liabilities, which include credit card balances, remaining mortgage payments and any other outstanding loans or debts. Subtract this number from the first. The remaining balance is your net worth. If the value of what you own is more than what you owe, then you have a positive net worth. Conversely, if you owe more money than what you have available to you, then you have a negative net worth.


While it seems easy enough to calculate, many people don’t know their net worth — much less keep tabs on it. But this simple formula is an important way to check in on how you’re doing financially.

If you have a large net worth, congratulations, you’re probably in good financial shape. If you have a negative net worth, you may have some work to do. Either way, keep in mind that this number is just a guideline that plays one part in mapping out your financial progress and future.


Improving your net worth is as simple as getting strategic about paying down your debt and/or increasing your savings. That may seem like a big mountain to climb, but small steps over time can add up to a big difference. When you’re ready to get started, a financial advisor can help you build a financial plan that balances building your net worth for the future with spending on the things that are important to you today.

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