How to Calculate Net Worth: Formula, Steps & Free Worksheet

Your net worth is the dollar value of everything you own minus everything you owe. It's the single clearest snapshot of your financial health.

You calculate net worth to track whether you're building wealth or falling behind. If your net worth grows quarter over quarter, your money decisions are working.

The formula to calculate net worth is:

Net Worth = Total Assets − Total Liabilities

• Assets are anything you own that has cash value: bank accounts, retirement accounts, real estate, vehicles, business equity, taxable brokerage accounts and personal property you could sell.
• Liabilities are debts you owe: mortgages, car loans, student loans, credit card balances, personal loans and any money borrowed from family or business lines of credit.

Follow these five steps to calculate net worth accurately in about 10 minutes.

1. 1List every asset with its current market value. Check your bank app for cash balances, your 401(k) portal for retirement account values, Zillow or a recent appraisal for home value, Kelley Blue Book for vehicle trade-in value, and brokerage statements for investment accounts. Include whole-life insurance cash value if you have it.

1. 1Total your assets. Add every dollar amount from step one into a single number. This is your total assets.

1. 1List every liability with the current balance owed. Log into each loan servicer or credit card to grab the exact payoff balance today, not the original loan amount. Include mortgage principal (not the home value), car loan balance, student loan balance, credit card debt, medical debt and any personal loans.

1. 1Total your liabilities. Add every debt balance into a single number. This is your total liabilities.

1. 1Subtract liabilities from assets. The result is your net worth. If it's negative, write it as −$X to track progress toward zero.

Most people use a spreadsheet, a notes app or one of the [free tools](/free-tools) we recommend to store this list and update it quarterly.

Here's a real scenario showing how to calculate net worth for a 32-year-old teacher.

This person has a positive net worth of $35,200. If they pay down $5,000 of debt over the next six months without touching assets, their net worth climbs to $40,200.

• Cash in checking, savings and money-market accounts
• Employer retirement accounts (401(k), 403(b), TSP) at current balance
• IRAs (traditional and Roth) at current balance
• Taxable brokerage accounts and index funds
• Real estate you own (primary residence, rental properties) at current market value

Usually exclude:

• Furniture, electronics and clothing (unless luxury items worth over $5,000 each)
• Retirement pensions you haven't started drawing yet
• Future Social Security benefits
• The principal portion of your mortgage already paid (that's baked into home equity)

Some people count jewelry, art or collectibles if they have documented appraisals and could sell quickly. Most skip household goods because resale value is low.

Home Equity = Current Home Value − Mortgage Balance

If your home appraises at $320,000 and you owe $210,000 on the mortgage, your equity is $110,000. You add the full $320,000 to assets and the $210,000 mortgage to liabilities.

Calculate net worth every three to six months if your finances are stable. Monthly updates make sense if you're paying off debt aggressively, building a business or navigating a big income change.

Retirement account values swing with the market, so some people track core net worth—assets and liabilities minus retirement balances—to see the wealth they control today. Either method works as long as you're consistent.

Using original purchase price instead of current value. Your car is worth what someone would pay today, not what you paid in 2019. Same for your home—use a recent Zillow estimate, not the price you closed at.

Forgetting to count retirement accounts. Your 401(k) is an asset even though you can't touch it without penalties. Include the full balance.

Ignoring small debts. The $800 you owe your brother or the $150 medical bill in collections both count as liabilities. Every dollar matters for an accurate calculation.

Double-counting mortgage and home value incorrectly. Add the home's full market value to assets and the full mortgage balance to liabilities. Don't subtract the mortgage from the home value before you enter it.

• Earn income and save more than you spend
• Pay down debt principal (every payment to a loan balance adds to net worth)
• Contribute to retirement accounts or investment accounts
• Own assets that appreciate (real estate, index funds, business equity)

Your net worth decreases when you:

• Spend more than you earn and add to credit card balances
• Take on new debt without acquiring an asset of equal or greater value
• Own assets that depreciate faster than you pay them off (new cars)
• Face investment losses or home-value declines

A healthy wealth-building trajectory shows net worth climbing 10–20% per year in your 20s and 30s (when income is rising and debt is falling), then 5–10% per year as you approach retirement and contributions stabilize.

Once you calculate net worth, compare it to your number from three or six months ago. Growth means your financial plan is working.

Benchmarking by age can provide context, but your own trend matters more than national medians. A 28-year-old with −$15,000 net worth who adds $10,000 in six months is outperforming someone with $50,000 who stays flat.

• Decide whether to prioritize debt payoff or investing (if net worth is negative, debt payoff often wins)
• Set a target for financial independence (many people aim for 25× annual expenses)
• Track progress toward buying a home, funding a business or retiring early
• Spot cash sitting idle that could move to a high-yield savings account or index fund

If your debt feels overwhelming or you want a professional review, check [find a pro](/find-a-pro) for vetted financial coaches.

What is a good net worth by age?

Median net worth in the US is roughly $12,000 at age 25, $50,000 at 35, $135,000 at 45 and $250,000 at 55, but these figures include people with zero savings and high earners. Focus on growing your own number year over year rather than comparing to national averages.

Should I include my car in my net worth calculation?

Do I count my 401(k) even though I can't withdraw it?

Yes, your 401(k) balance is an asset because it's money you own. Early withdrawal penalties don't change the fact that the account has value today.

Can my net worth be negative?

Yes, and it's common for people with student loans, new mortgages or credit card debt early in their careers. A negative net worth means your liabilities exceed your assets.

How is net worth different from income?

For more guides on managing debt and building wealth, visit [money and debt](/money-and-debt) or browse the [blog](/blog) for step-by-step walkthroughs.