Your net worth is the clearest single number for your financial health. It answers one question: if you sold everything you own and paid off everything you owe, what would be left?
The net worth formula
The formula is simple:
Net worth = Total assets − Total liabilities
Assets are what you own that has value. Liabilities are what you owe. Subtract one from the other and you have your net worth — which can be positive or negative.
Step 1: Add up your assets
List everything you own that could be converted to cash. Group them so nothing gets missed:
- Cash & equivalents — checking, savings, money market, cash on hand
- Investments — brokerage accounts, stocks, bonds, mutual funds, crypto
- Retirement accounts — 401(k), 403(b), IRA, pension cash value
- Real estate — the current market value of your home and any other property
- Vehicles — cars, motorcycles, boats (use realistic resale value)
- Other valuables — business ownership, collectibles, jewelry (only if significant)
Use current market values, not what you paid. For your home, a recent comparable sale or an online estimate is close enough.
Step 2: Add up your liabilities
Now list everything you owe:
- Mortgages — the remaining balance, not the original loan
- Auto loans
- Student loans
- Credit card balances
- Personal loans and lines of credit
- Any other debt — medical bills, money owed to family, taxes owed
Step 3: Subtract
Take total assets and subtract total liabilities. That's your net worth. You can do all of this in about two minutes with our free net worth calculator, which saves your entries in your browser so you can update them later.
What a negative net worth means
A negative number is common — especially early in a career, or right after buying a home or finishing school. It is not a crisis. A recent graduate with student loans and little savings often has a negative net worth, then climbs steadily as they pay down debt and build assets. The trend matters far more than a single reading.
How often should you check?
Once a quarter is plenty for most people. Checking monthly can help if you are aggressively paying down debt and want the motivation. Pick a consistent day — the first of the quarter works well — and record the number so you can see the trajectory.
The bottom line
Net worth is a scoreboard, not a scorecard for your worth as a person. Calculate it, write it down, and watch the direction over time. Consistent upward movement is the goal — run your numbers now.