Why You Should Regularly Calculate Your Net Worth


Do you know how much you are actually worth? Your net worth sums up the current value of what you own minus what you owe to give you a bottom-line dollar amount representing your financial situation—so it is an important metric to track over time as it indicates whether your financial health is improving or declining. Your net worth is a big-picture snapshot of your financial health, and tracking it can show whether habits like saving and debt repayment are positively impacting your money.

How to calculate your net worth

Know your total assets

Calculating net worth starts with tallying all current assets, which may include:

  • Cash accounts like savings and checking accounts

  • Investment accounts such as retirement plans and brokerages

  • The estimated current resale value of your home

  • The value of vehicles or other property owned

Next, account for debts

The next step is to understand the total debts you currently hold, which may consist of:

Subtract debts from assets

Once you have identified current cash values for both assets and debts individually, simply subtract your debts from assets to calculate your net worth.

For example: Total assets = $300,000; total debts = $150,000; net worth = $150,000.

Simply put, your net worth = assets – liabilities. There are more specific online calculators to use as well.

Track changes over time

The power of knowing your net worth comes from tracking it over regular intervals, such as quarterly or annually. As you repay debts and accumulate additional assets, you will see your total net worth rise, indicating positive financial growth.

Having clarity on your complete financial picture allows you to make better decisions improving your situation over time. Do the math to calculate your current net worth—you may be wealthier than you think.

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