How to calculate your net worth
Your net worth is what you own minus what you owe. A step-by-step guide to adding it up, putting a value on your home and debts, and reading the result.
Updated
The formula
Net worth is everything you own minus everything you owe. Accountants call the two sides assets and liabilities, but you don’t need the words. If you sold everything today and paid off every debt, the money left over would be your net worth.
Here’s an example of one household:
| What they own | Value |
|---|---|
| Checking and savings | $18,000 |
| 401(k) | $42,000 |
| Home | $380,000 |
| Car | $14,000 |
| Total | $454,000 |
| What they owe | Balance |
|---|---|
| Mortgage | $290,000 |
| Student loan | $21,000 |
| Credit card | $1,500 |
| Total | $312,500 |
Their net worth is $454,000 − $312,500 = $141,500.
Step 1: list what you own
Go through your accounts and belongings and write down what each is worth today.
- Bank accounts. The current balance of every checking and savings account.
- Investments. Brokerage accounts, funds and retirement accounts such as a 401(k) or IRA, at their current value. Your broker’s app shows it.
- Your home and other property. What it would sell for now, not what you paid. Recent sales of similar homes nearby are the best guide. When in doubt, pick the lower estimate.
- Vehicles. What you could sell the car for, which is usually a lot less than its price new.
- Crypto, cash and anything else you would actually sell, like a collection or money someone owes you.
Leave out things you’d never sell or that would fetch little, such as furniture, clothes and your phone. What counts toward your net worth? goes through the tricky cases, like pensions and stock options.
Step 2: list what you owe
- Mortgage. The balance still outstanding, which is on your latest statement. Not the amount you originally borrowed.
- Loans. Student loans, car loans and personal loans, each at its current balance.
- Credit cards. What you’d owe if you paid them off today, even if you clear them every month.
- Everything else: buy now, pay later plans, a tax bill that’s due, money borrowed from family.
Step 3: subtract
Add up each list and subtract the second total from the first. That’s it. The net worth calculator does the adding for you, one line per type.
What the result tells you
A single number is a snapshot. It says where you stand today, not whether you’re on the right track. If you recently graduated or just bought a home, it may well be negative, and that’s normal. Loans come first and the savings come later.
The number becomes useful when you check it again. Three months from now, has it gone up or down, and why? How often should you track your net worth? covers a simple routine, and average net worth by age shows how others are doing.
Common mistakes
- Using what you paid. Homes, cars and investments are worth what they’d sell for now.
- Forgetting small debts. A card balance or a payment plan is easy to overlook and adds up.
- Counting your home twice, or not at all. List the home at its full value under what you own and the mortgage under what you owe. Don’t also add “home equity”: the subtraction already takes care of it.
- Mixing up income and net worth. A high salary doesn’t mean a high net worth. Net worth is what you’ve kept, not what you earn.