How to Calculate Your Net Worth

Getty Images

Do you know what your net worth is? If not, now is the time to find out. Why? Because your net worth can tell you a lot about your current financial health, and help you to plan for your financial future —​ now, that's frugal and smart.

How Is Net Worth Calculated?

Net Worth is calculated by subtracting your liabilities (debts) from your assets. Depending on your finances, the resulting figure can be positive (desirable) or negative (not so desirable).

Which will it be for you? Follow the steps below to find out.

Difficulty: Average

Time Required: 1 hour

Here's How:

  1. Print out a copy of a Net Worth Worksheet
  2. Use the left-hand column to list all of your assets. This includes:

    • cash, money held in bank accounts, money market accounts or Certificates of Deposit (CDs)
    • personal property, including homes, cars, boats and recreational vehicles, furniture, art, antiques, collectibles and jewelry
    • investments, including stocks, bonds, mutual funds, annuities, the cash value of any life insurance policies and real estate
    • retirement savings, including employee pension plans, 401(k) or 403(b) accounts and IRAs
  3. Then, assign a value to each asset. This should be the estimated resale value of the asset, not what you paid for the item.

  4. Total the value of your assets, and write the resulting figure at the bottom of the left-hand column.

  5. Use the right-hand column to list all of your liabilities (debts). This includes: mortgages, home equity loans, car loans, credit cards, bank loans, student loans, personal loans from friends and family, cash advances, medical bills, taxes owed, alimony/child support owed and any other debts that you might have.

  1. Total your liabilities, and write the resulting figure in the "Total Liabilities" field, near the bottom of the right-hand column.

  2. Subtract your total liabilities from your total assets. The resulting figure is your current net worth. If the number is positive, you're on the right track. Keep squeezing those pennies and building wealth. If your number is negative, all is not lost. Check out the following resources, to get your finances back on track:


    1. Use antique and collectible books to assess the value of your collections. Use Kelley Blue Book to determine the value of your vehicles.
    2. Update your net worth yearly or whenever there is a major change to your finances.

    Continue Reading...