How to Calculate Net Worth: Formula, Examples & Tips

The formula

Net Worth = Total Assets − Total Liabilities

Assets are things with cash value you could sell or withdraw. Liabilities are debts you owe. A positive result means your assets exceed your debts; a negative one means the reverse.

What counts as an asset

• Cash: checking, savings, money market accounts and CDs.
• Investments: brokerage accounts, stocks, bonds, funds and any crypto, at current market value.
• Retirement accounts: 401(k), IRA and similar balances. Some people list these after estimated taxes for a more conservative figure.
• Real estate: an estimated current market value, ideally reduced by likely selling costs.
• Vehicles: what you could realistically sell them for today, not what you paid.
• Other valuables: only items you could actually sell for meaningful value.

What counts as a liability

• Mortgages: the remaining principal balance, not the original loan amount.
• Car loans and personal loans: current payoff balances.
• Student loans: total outstanding balance, including any accrued interest.
• Credit cards: the full current balance, even if you pay it off monthly.
• Other debts: medical bills, tax owed, money owed to family.

Worked example

Positive vs negative net worth

A negative net worth is common early in a career, especially with student loans. For example, a recent graduate with $6,500 in savings and $39,500 in student and card debt has a net worth of −$33,000. That's a starting point to measure progress from, not a judgment.

A high net worth can also hide a cash-flow problem if most of it is tied up in a home. Looking at liquid assets separately — cash and investments you could access — gives a fuller picture.

Why tracking over time helps

Recalculating every few months shows whether you're moving in the right direction. Paying down debt and saving both raise net worth, while market swings and home value changes can move it in ways you don't control. Using the same valuation method each time keeps the comparison fair.

Common mistakes

• Using the purchase price of a car or home instead of today's value.
• Listing the original mortgage amount instead of the remaining balance.
• Leaving out small debts like store cards or buy-now-pay-later plans.
• Counting the same account twice (for example, a brokerage account and its holdings separately).
• Comparing yourself to averages instead of your own past numbers.

How to use the Net Worth Calculator

1. List each asset and its current value.
2. List each debt and its remaining balance.
3. Press Calculate to see total assets, total liabilities and your net worth.
4. Save the figure somewhere and repeat in a few months to see the trend.

If paying down debt is your next step, the Debt Payoff Calculator shows how extra payments shorten the timeline, and the Emergency Fund Calculator helps size a cash cushion.