What net worth means
Net worth is the single clearest number for your financial health — everything you own minus everything you owe:
Net worth = Total assets − Total liabilities
It captures your whole financial picture in one figure. A high income with high debt can mean a low net worth, while modest earners who save steadily can build a surprisingly large one.
Use current values
For assets, enter what they would sell for today — the market value of your home and car, the current balance of your accounts — not what you paid. For liabilities, use the current payoff balance, not the original loan amount. That keeps the snapshot accurate.
The debt-to-asset ratio
This is your total liabilities divided by your total assets, as a percentage. A lower ratio means you own more of what you have outright. As you pay down debt and your assets grow, the ratio falls — a useful companion metric to track alongside net worth itself.
Frequently asked questions
How do you calculate net worth?
Add up everything you own (assets) and subtract everything you owe (liabilities). Net worth = total assets − total liabilities. If you have $495,000 in assets and $274,000 in debts, your net worth is $221,000.
What counts as an asset?
Anything of value you own: cash and bank balances, investments, retirement accounts, the market value of real estate, vehicles, and valuables. Use current market values, not what you originally paid.
What counts as a liability?
Everything you owe: your remaining mortgage balance, car and student loans, credit card balances, and any other debts. Use the current payoff balance, not the original loan amount.
Is it normal to have a negative net worth?
Yes, especially early in life. Student loans, a new mortgage, or a car loan can outweigh your assets for a while. What matters is the trend — tracking net worth over time shows whether you are moving in the right direction as you pay down debt and build savings.
Disclaimer: This is a snapshot for personal tracking, not financial advice. Net worth is most useful watched over time rather than as a single number.