How to Calculate Your Net Worth

Do you know your net worth? If not, it’s time to find out. Figuring out how to calculate your net worth is one of the most crucial steps to taking control of your financial life. By calculating your net worth, you can see exactly where you stand financially, identify areas where you need to make changes, and take actions to improve your situation. 

What is Net Worth?

Net worth is the difference between a person’s assets (everything they own) and liabilities (everything they owe).


The calculation for net worth is:

Net Worth = Total Assets – Total Liabilities


It’s a good idea to calculate your net worth at different points in time so you can see the change. If your net worth is increasing over time, it means you’re becoming wealthier. If it’s decreasing, it means you’re becoming poorer. 

How to Calculate Your Net Worth in Three Easy Steps


1. Add up all of your assets. This includes everything you own that has monetary value, such as your savings, investments, and home equity. Be sure to include balances such as your 401k, pension, and IRA.

2. Add up all of your liabilities. This includes any money you owe, such as your mortgage, car loan, and credit card debts. If you owe your sister money, add that in too!

3. Subtract your liabilities from your assets to calculate your net worth. 

What the Numbers Mean and How to Use Them to Improve Your Financial Health

To put this number in perspective, a net worth of 0 would mean that an individual has the same amount of assets as liabilities. Positive net worth means an individual has more assets than liabilities and negative net worth means that an individual has more liabilities than assets.

Tips for Increasing Your Net Worth Over Time

Your ultimate goal is to ensure your net worth is increasing over time. This can be a gradual process as it can take time to go from negative to positive and to build a high net worth.


Some Things You Can Do Are:

– Invest – Contribute to your 401k or IRA

– Purchase property – whether your own home or an investment property

– Save – contribute to your emergency fund or your general savings

– Paying down on high-interest debt

– Budget and reduce your expenses

– Track your net worth


One of the easiest things that you can do to increase your net worth is to simply track it. Tracking your net worth also gives you a target number to work towards. It also triggers action. If you notice your net worth going down, you can take steps to improve it.

Additional Resources on Calculating and Improving Your Net Worth

If you’d like to calculate your net worth, there are several calculators on the web that can help. They typically ask for some basic information about you and your money, such as what’s in your wallet (cash, checking accounts, savings accounts) and how much debt (credit cards, car loans, student loans) you have. Some calculators will ask for additional information about your assets (home value, cars, etc.) or real estate holdings.

You can also try a website like Personal Capital, where you would link your accounts on the app and they will monitor your net worth in real-time.


Calculating your net worth is an important step in determining your overall financial health because it gives you a snapshot of the value of everything that you own minus what you owe. This figure can help determine your financial stability and guide you to take steps towards improving it.

FUNDRISE | Real Estate Investing

About Kamilah

My name is Kamilah and I am a native New Yorker of Caribbean descent who is passionate about helping you learn how to invest and build your net worth by sharing easy-to-follow YouTube tutorials that will help you take control of your money and set you up for financial success. But this wasn’t always my story.

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