How to Calculate Net Worth: A Simple Guide With Examples
Most people think checking their bank balance counts as “doing money.” That is like weighing yourself with one foot on the scale. If you want the truth, you calculate net worth. Do it once, you get clarity. Do it monthly, you get power.
Here is why this matters. A majority of Americans are still stressed about money. Around 60 percent live paycheck to paycheck, and 61 percent carry credit card debt with an average balance near $5,875 according to CNBC reporting. Only about 45 percent say they have an emergency fund. Translation, if you do not know your net worth, you are flying blind. Your income is how loud you can shout. Your net worth is how far your voice carries.
Sources: CNBC
The Federal Reserve’s Survey of Consumer Finances shows the median household net worth was about $192,900 in 2022, sharply higher than 2019. Wealth is uneven, but the direction is clear, tracking your number changes behavior. Source: Federal Reserve SCF 2019 to 2022.
The only formula you need
Net worth = total assets minus total liabilities.
That is it. No smoke, no mirrors, no 19-tab spreadsheet. The magic comes from doing it consistently and valuing things conservatively.
How to calculate net worth in 15 minutes
- Pick a date, end of month works best.
- List your assets, everything you own that has monetary value.
- Assign a conservative value to each asset.
- List your liabilities, everything you owe.
- Total assets, total liabilities, subtract.
- Record the result and your month over month change.
Pro tip, precision is overrated, consistency is undefeated. Get within 1 to 2 percent and move on.
Assets vs liabilities, explained with realistic values
Think of assets as what puts money in your pocket, or could be sold for money. Liabilities take money out of your pocket.
Assets, common examples and valuation rules:
- Cash and cash equivalents, checking, savings, money market, value at balance today.
- Investments, 401(k), IRA, Roth, HSA, brokerage, 529, value at current statement.
- Real estate, primary home and rentals, use a realistic market estimate, not your Zillow-on-a-good-day fantasy. Subtracting the mortgage comes later.
- Vehicles, cars, motorcycles, use a resale estimate like KBB or a quick local comps check, not original purchase price.
- Business ownership, use a conservative estimate or book value, zero is fine until you have a real valuation.
- Cash value life insurance, use surrender value.
- Prepaid items and deposits, security deposits, gift cards, store credits with cash-like value.
Liabilities, common examples:
- Mortgage and HELOC balances.
- Auto loans.
- Student loans.
- Credit cards and buy now pay later balances.
- Personal loans.
- Taxes owed that you have not paid yet.
What not to count:
- Future paychecks or bonuses, not cash yet.
- Unvested stock compensation, count only the vested portion.
- Your degree or “earning potential,” valuable, but not liquid.
- Household goods at retail price, most used stuff has low resale value. If you include collectibles, be conservative.
Want to make sure you are not missing anything subtle like HSAs, I bonds, or deposits, see our guide on hidden assets most people forget to track.
Example, a realistic net worth snapshot
Meet Maya, 29. Decent job, modest condo, a couple of lingering debts. She thinks she is “bad with money.” Let us verify.
Assets
| Asset | Value | Notes |
|---|---|---|
| Checking | $5,000 | Current balance |
| High-yield savings | $8,000 | Emergency fund in progress |
| HSA | $3,000 | Invested HSA |
| 401(k) | $42,000 | Pre-tax |
| Roth IRA | $9,000 | Long-term |
| Brokerage | $6,000 | Index funds |
| Home, market value | $380,000 | Conservative estimate |
| Car, resale value | $12,000 | Private sale estimate |
| Crypto | $1,200 | Volatile, keep small |
| Gift cards and credits | $150 | Cash-like only |
| Total assets | $466,350 |
Liabilities
| Liability | Balance | Notes |
|---|---|---|
| Mortgage | $310,000 | 30 year fixed |
| Auto loan | $7,000 | 3 years left |
| Student loans | $18,000 | Standard plan |
| Credit cards | $1,400 | Will pay down |
| Buy now pay later | $300 | Remaining installments |
| Total liabilities | $336,700 |
Net worth = $466,350 minus $336,700 = $129,650.
Maya thought she was behind. Reality, she has six figures of net worth because of home equity and retirement accounts. The story changed in 15 minutes.
Quote to remember, income pays the bills, net worth buys freedom.
Copy this quick net worth template
Use this every month. Replace amounts with your numbers.
Assets template
| Asset | Amount | Notes |
|---|---|---|
| Checking | $0 | |
| Savings and money market | $0 | |
| HSA | $0 | |
| 401(k) | $0 | |
| IRA or Roth IRA | $0 | |
| Brokerage | $0 | |
| Real estate, market value | $0 | |
| Vehicles, resale value | $0 | |
| Other assets, cash value | $0 | |
| Total assets | $0 |
Liabilities template
| Liability | Amount | Notes |
|---|---|---|
| Mortgage | $0 | |
| HELOC | $0 | |
| Auto loans | $0 | |
| Student loans | $0 | |
| Credit cards | $0 | |
| Personal loans or BNPL | $0 | |
| Taxes owed | $0 | |
| Total liabilities | $0 |
Final line: Net worth = Total assets minus Total liabilities.
Your 5 minute monthly net worth routine
- Update balances for cash, investments, and debts.
- Adjust home and car values quarterly, not daily.
- Check for double counting, if you list a 401(k) loan as a liability, subtract it from the 401(k) balance or record the loan separately, not both.
- Record your net worth and month over month change. A small dip in a rocky market is normal. The trend is what matters.
- Add one sentence on why it changed. Example, “Up $2,300, tax refund hit and credit card balance down.”
Common mistakes to avoid
- Counting stuff you cannot resell for real cash. If it would sit on Facebook Marketplace for weeks, maybe it is worth zero for this purpose.
- Using optimistic real estate values. If the number makes you feel rich, haircut it.
- Ignoring taxes owed. An underpayment can wipe out a month of progress.
- Forgetting recurring debts like buy now pay later or medical payment plans.
- Mixing business and personal without notes. If you include a business, use a conservative estimate or zero until you have a valuation.
What to do after you calculate net worth
- If your net worth is negative, welcome to the club at the start of the journey. Focus on an emergency fund and a debt payoff plan. Our guides can help, start with Building Your Emergency Fund and Debt Payoff Smackdown.
- If your net worth is positive but slow, increase your savings rate. Even a 5 to 10 percent bump compounds into years shaved off your working timeline. Read Boost Your Savings Rate.
- If you are investing for the long haul, keep it simple and automated. See our index fund guide.
FAQs
How often should I calculate net worth? Monthly is the sweet spot. Weekly is noise, quarterly is fine for real estate updates. Should I include my car? Yes, use a realistic resale value. Vehicles usually depreciate, so do not kid yourself. Do I count unvested RSUs or options? No. Only include vested equity. Unvested shares are potential, not money. What about 401(k) loans? You can either record the 401(k) balance net of the loan, or list the loan as a liability and keep the 401(k) at its full balance. Do not double count. Are 529 college funds part of my net worth? If you own the account, they are technically your asset. Some people track them but exclude from “available for retirement” notes. Just be consistent. Do I count rewards points and miles? Only if they can be converted to cash at a known rate. Most cannot, so zero is a safe default.Net worth is your freedom score. Calculate it once, you see where you stand. Calculate it monthly, you change where you are going. Set a date, grab your numbers, and make the next update part of your routine. Your money should not swing like a crypto chart, your plan should.