How to calculate your net worth
Net worth is what you own minus what you owe. Tracking it once or twice a year shows your progress.
Sourced from official pages · Updated September 30, 2026💡 Key takeaways
- Net worth = total assets − total liabilities.
- Use realistic values for things like a home or car.
- Count retirement accounts at their current balance, remembering they may be taxed when withdrawn.
- Update it at the same time each year to see progress.
The formula
Net worth = total assets − total liabilities. Assets are what you own (cash, investments, retirement accounts, home value, car). Liabilities are what you owe (mortgage, student loans, car loans, credit cards).
Tips
- Use realistic values for things like a home or car.
- Count retirement accounts at their current balance (they may be taxed when withdrawn).
- Update at the same time each year so you can compare.
Use the net worth calculator.
What to include
| Assets (what you own) | Liabilities (what you owe) |
|---|---|
| Cash and savings | Mortgage |
| Investments and retirement accounts | Student loans |
| Home value, car | Car loans, credit cards, other debt |
Using the number
- Track it once or twice a year rather than daily.
- Focus on the trend, not one reading.
- Raise it by paying down debt and saving or investing consistently.
🔤 Key terms
| Term | Meaning |
|---|---|
| Asset | Something you own with value |
| Liability | Something you owe |
| Liquid assets | Cash and things you can sell quickly |
| Equity | Home value minus what you owe on it |
🧮 Example (hypothetical)
Suppose you own a home worth $300,000, $40,000 in savings and investments and $10,000 in a car, for $350,000 of assets. You owe $180,000 on a mortgage, $20,000 on student loans and $10,000 on a car loan and cards, for $210,000 of liabilities. Net worth = $350,000 − $210,000 = $140,000.
⚠️ Common mistakes to avoid
- Overstating home or car values.
- Forgetting small debts.
- Comparing yourself with others instead of your own trend.
- Ignoring taxes on retirement account balances.
🛠️ Try it yourself
❓ Frequently asked questions
Can net worth be negative?
Yes, especially with student or other debt; it can improve over time.
Should I include my car?
Yes, at a realistic current value.
How often should I calculate it?
Once or twice a year is common.
📚 Sources
This guide is general information, not financial, tax or legal advice. Rules and limits change; confirm with the sources above or a licensed professional.