Written by Megan Sullivan
Net worth is the ultimate measure of financial health - more important than salary, credit score, or how much is in your checking account.
Assets (what you own) - Liabilities (what you owe) = Net Worth
Assets:
Liabilities:
Net worth: $370,000 - $265,000 = $105,000
Someone making $150,000 with $200,000 in debt and no savings has a lower net worth than someone making $60,000 with $100,000 saved and no debt. Income is what you make. Net worth is what you keep.
List everything you own and everything you owe. Be honest.
Monthly or quarterly. Use a spreadsheet or apps like Personal Capital, Mint, or YNAB.
Is it going up consistently? That's what matters. Month-to-month volatility is normal (markets fluctuate), but the trend should be upward.
These vary wildly based on income, location, and life choices. Don't stress if you're behind - just focus on growing it.
Once you focus on net worth, you make different decisions. That $40,000 car that "everyone" has? It drops your net worth by $40,000 instantly. That $500/month investment? It increases your net worth by $6,000 this year, and keeps growing.
Include your retirement accounts in net worth calculations, but don't count your primary home if you prefer a conservative estimate (you have to live somewhere). Some people calculate "liquid net worth" (excluding home and retirement accounts) to see what they could access in an emergency.
Net worth is the scorecard. Everything else - income, credit score, job title - is just a tool to increase it. Track it, grow it, and watch your financial security compound.
Calculate your complete financial picture with our Net Worth Calculator!