How to Calculate Your Net Worth (Simple Worksheet and What a Good Number Looks Like)
Net worth is the one number that tells you whether you are actually getting richer. Income can be high while wealth goes nowhere; net worth cannot hide that. This guide shows how to calculate net worth in about ten minutes, what to include, what people get wrong, and how your number compares with others your age.
The formula
Net worth = what you own (assets) minus what you owe (liabilities). If you own $60,000 in savings, investments and a car, and owe $25,000 in loans, your net worth is $35,000. It can be negative, and for most people under 30 with student debt it is. That is a starting point, not a verdict.
Step 1: List your assets
| Asset | How to value it |
|---|---|
| Cash and bank accounts | Today’s balances |
| Retirement accounts (401(k), IRA, pension pots) | Current balance, before tax |
| Brokerage and investment accounts | Current market value |
| Home | Realistic sale price today, not what you paid |
| Vehicles | Private-sale value from a pricing guide |
| Business ownership | What a buyer would pay, conservatively |
| Other (jewellery, collectibles, money owed to you) | Resale value only |
Leave out things you could not sell: furniture, electronics, clothes. They inflate the number without changing your position.
Step 2: List your liabilities
- Mortgage balance (the amount still owed, not the monthly payment)
- Student loans
- Car loans
- Credit card balances
- Personal loans, buy-now-pay-later balances, money owed to family
- Tax you know you owe
Step 3: Subtract
Add up column one, add up column two, subtract. Write the date next to it. The number matters far less than the direction it moves over the next twelve months.
A worked example
| Item | Amount |
|---|---|
| Checking and savings | $8,500 |
| 401(k) | $31,000 |
| Car (resale) | $12,000 |
| Total assets | $51,500 |
| Student loan | $18,000 |
| Car loan | $7,500 |
| Credit card | $1,900 |
| Total liabilities | $27,400 |
| Net worth | $24,100 |
Common mistakes
- Counting your home at purchase price. Use a current estimate and subtract selling costs if you want to be strict.
- Forgetting the mortgage. A $400,000 house with a $350,000 mortgage adds $50,000, not $400,000.
- Counting income. Salary is not an asset. Only what you have kept counts.
- Ignoring small debts. Three buy-now-pay-later plans and a store card add up.
What is a good net worth by age?
The Federal Reserve’s Survey of Consumer Finances gives the clearest picture for the United States. Medians (the middle household) are the useful comparison; averages are pulled up by the very wealthy.
| Age of household head | Median net worth (latest survey) |
|---|---|
| Under 35 | About $39,000 |
| 35 to 44 | About $135,000 |
| 45 to 54 | About $247,000 |
| 55 to 64 | About $364,000 |
| 65 to 74 | About $410,000 |
A simple rule of thumb from The Millionaire Next Door: multiply your age by your pre-tax income and divide by ten. At 35 earning $70,000 that target is $245,000, which is demanding for most people; treat it as a stretch goal rather than a pass mark.
How to move the number
- Track it quarterly. Same spreadsheet, same date. Four data points a year is enough to see the trend.
- Pay down high-interest debt first. Clearing a 24 percent credit card raises net worth faster than any investment.
- Automate saving. A fixed transfer on payday into a retirement or index fund account grows the asset side without willpower.
- Avoid depreciating assets on credit. A financed car often adds a liability larger than the asset within a year.
Frequently asked questions
Should I include my pension in net worth?
Defined-contribution pots (401(k), IRA, workplace pension) yes, at current value. A defined-benefit pension is harder; most people leave it out and note it separately.
Is a negative net worth bad?
It is common early in adult life. What matters is whether it is rising each year.
How often should I calculate it?
Quarterly is enough. Monthly tracking encourages reacting to market noise.
