How to Calculate Your Net Worth (Step-by-Step)
Net worth is the single most important number in personal finance. Here is exactly how to calculate yours in 5 minutes.
The Formula
Net Worth = Total Assets - Total Liabilities
That is it. Add up everything you own, subtract everything you owe. The result is your net worth. It can be positive (you own more than you owe) or negative (you owe more than you own).
Step 1: List Your Assets
Assets are everything you own that has monetary value:
Cash and Savings
- Checking accounts
- Savings accounts
- Money market accounts
- CDs (certificates of deposit)
- Cash on hand
Investments
- Brokerage accounts
- 401(k) and IRA balances
- Roth IRA
- HSA (Health Savings Account)
- Stocks, bonds, mutual funds
Property
- Primary residence (market value)
- Rental properties
- Land
- REITs or real estate funds
Other
- Vehicles (current market value)
- Jewelry or collectibles
- Business equity
- Life insurance cash value
Step 2: List Your Liabilities
Liabilities are everything you owe:
- Mortgage — remaining balance, not the original loan amount
- Student loans — federal and private
- Auto loans — remaining balance
- Credit card debt — current balances
- Personal loans — including family loans
- Medical debt — outstanding balances
- Tax debt — any owed to IRS/state
Step 3: Subtract and Get Your Number
Use our free net worth calculator to add your assets and liabilities. It will calculate your net worth, show you a breakdown by category, and give you a financial health score.
Net Worth Benchmarks by Age
| Age | Median | Average | Rule of Thumb |
|---|---|---|---|
| 25 | $8,000 | $50,000 | 0.5x salary |
| 30 | $10,000 | $76,000 | 1x salary |
| 35 | $35,000 | $200,000 | 2x salary |
| 40 | $80,000 | $400,000 | 3x salary |
| 50 | $170,000 | $800,000 | 6x salary |
| 60 | $270,000 | $1.2M | 8x salary |
Source: Federal Reserve Survey of Consumer Finances. Average is skewed by high earners.
Common Mistakes
- Overvaluing your car. Use Kelley Blue Book, not what you paid. Cars depreciate fast.
- Forgetting retirement accounts. Your 401(k) and IRA are assets even if you cannot touch them yet.
- Ignoring small debts. That $500 medical bill and $200 store credit card count.
- Using your home purchase price. Use current market value from Zillow or Redfin, not what you paid.
- Not tracking regularly. Calculate quarterly, not once. The trend matters more than any single number.
What is a Good Net Worth?
There is no single "good" number. What matters is: (1) is your net worth positive? (2) is it growing? If both answers are yes, you are on the right track. If your net worth is negative, focus on paying off high-interest debt first. Use our debt payoff calculator to make a plan.