How to Calculate Your Net Worth (and Why It Matters)
4 min read · Last reviewed July 1, 2026
Net worth is the single clearest snapshot of your finances: everything you own, minus everything you owe. It doesn't care how much you earn — it measures what you've actually kept and built.
This guide shows how to work it out, what belongs in each column, and why the number is most useful watched over time rather than judged in a single moment.
The formula: assets minus liabilities
Net worth is total assets minus total liabilities. Assets are things of value you own; liabilities are debts you owe. If you own 250,000 in assets and owe 180,000, your net worth is 70,000.
The number can be negative — common early in life with student loans or a new mortgage — and that's fine. What matters is the direction it moves over time.
What to include
Assets include cash and savings, investments and pensions, the market value of your home and car, and anything else you could reasonably sell. Use realistic current values, not what you paid or what you hope to get.
Liabilities include your mortgage, car finance, student and personal loans, and outstanding credit card balances. Add them all up honestly — leaving out an awkward debt only fools you.
Why it's worth tracking
Income tells you what's coming in; net worth tells you what's staying. Two people on the same salary can have wildly different net worths depending on how they spend, save, and borrow.
Checking it once or twice a year turns abstract financial habits into a visible trend line. A steadily rising number is the clearest sign your money decisions are working, even in months when progress doesn't feel obvious.
Frequently asked questions
▶What should I include in my net worth?
As assets: cash, savings, investments, pensions, and the current value of property and vehicles. As liabilities: mortgages, loans, car finance, and credit card balances. Net worth is the first total minus the second.
▶Is it bad to have a negative net worth?
Not necessarily. It's common when you're young or have just taken on a mortgage or student loan. What matters is that the number trends upward over time as debts shrink and assets grow.