How to Calculate Your Net Worth (With Examples)

Your net worth is one of the most important numbers in personal finance. It tells you exactly where you stand financially by measuring the gap between what you own and what you owe. Whether you are just starting your career or planning for retirement, tracking your net worth over time reveals whether your financial decisions are moving you in the right direction.

In this guide, you will learn the exact formula, see how to categorize every asset and liability, walk through realistic examples, and compare your results to national benchmarks by age group. By the end, you will have everything you need to calculate your own net worth in under 30 minutes.

What Is Net Worth?

Net worth is the total value of everything you own minus everything you owe. Think of it as a financial snapshot taken at a specific moment in time. A positive net worth means your assets exceed your debts. A negative net worth means you owe more than you own, which is common for younger adults carrying student loans or new homeowners with large mortgages.

Unlike income, which measures money flowing in, net worth measures accumulated wealth. Someone earning $200,000 per year with $300,000 in debt and no savings has a lower net worth than someone earning $50,000 with a paid-off home and healthy investment accounts. This is why net worth provides a more complete picture of financial health than income alone.

The Net Worth Formula

The calculation itself is straightforward:

The challenge lies not in the math but in accurately identifying and valuing all your assets and liabilities. Missing even one account can skew your results significantly. The sections below will help you build a complete inventory.

Assets: What You Own

Assets are anything of monetary value that you own. They fall into three main categories: liquid assets, invested assets, and physical assets. Listing them all is the first step in your net worth calculation.

Liquid Assets

Liquid assets are cash or items you can convert to cash quickly without a significant loss in value. These include:

• Checking accounts - your everyday spending money
• Savings accounts - including high-yield savings
• Money market accounts - higher-interest deposit accounts
• Certificates of deposit (CDs) - though early withdrawal penalties may apply
• Cash on hand - physical cash you keep outside banking institutions

Invested Assets

Invested assets are financial instruments that may fluctuate in value and typically cannot be accessed as quickly as cash. Use the current market value for each:

• Retirement accounts - 401(k), 403(b), IRA, Roth IRA (the 2026 contribution limit for 401(k) plans is $24,500; for IRAs it is $7,500)
• Brokerage accounts - stocks, bonds, mutual funds, and ETFs
• Health Savings Accounts (HSAs) - these have investment and tax advantages
• 529 education savings plans - for yourself or dependents
• Business ownership stakes - equity in a private business you own
• Cryptocurrency holdings - use the current market price

Physical Assets

Physical assets are tangible items with resale value. Be conservative with your estimates and use current fair market value rather than what you originally paid:

• Primary residence - your home's current estimated market value
• Other real estate - rental properties, vacation homes, land
• Vehicles - cars, trucks, motorcycles, boats
• Jewelry and collectibles - only items with meaningful resale value
• Household items - furniture, electronics (often minimal resale value)

Liabilities: What You Owe

Liabilities include every debt or financial obligation you carry. Use the current outstanding balance for each one, not the original loan amount.

Short-Term Liabilities

• Credit card balances - total outstanding across all cards
• Medical bills - any unpaid medical debt
• Personal loans - including buy-now-pay-later balances
• Taxes owed - any outstanding federal, state, or local tax obligations

Long-Term Liabilities

• Mortgage balance - remaining principal on your home loan
• Student loans - federal and private student loan balances
• Auto loans - remaining balance on vehicle financing
• Home equity loans or HELOCs - outstanding balance
• Business loans - if personally guaranteed

Step-by-Step Net Worth Calculation

Follow these five steps to calculate your net worth accurately:

1. Gather all financial statements. Log in to every bank, brokerage, retirement, and loan account. Pull up your most recent mortgage statement and any other debt records.
2. List every asset with its current value. Create a spreadsheet or use a notebook with three columns: asset name, category, and current value. Be thorough. Check under the couch cushions, figuratively speaking.
3. List every liability with its current balance. Include every debt, no matter how small. That $200 you owe a friend counts.
4. Add up total assets and total liabilities separately. Sum each column independently to get your total assets and total liabilities.
5. Subtract liabilities from assets. The result is your net worth. Write down the date so you can track changes over time.

Real-World Examples

These fictional scenarios illustrate how net worth calculations work for people at different life stages.

Marcus has a positive net worth despite carrying significant student debt. His 401(k) contributions and modest savings keep him above water. At 27, he is on a solid trajectory.

Linda and James have built significant wealth primarily through homeownership and consistent retirement contributions. Their net worth places them comfortably above the median for their age group.

Priya has a negative net worth, which is entirely normal for a recent graduate. As she makes student loan payments and begins contributing to a retirement plan, her net worth will steadily climb into positive territory over the next several years.

Net Worth Benchmarks by Age

The Federal Reserve Survey of Consumer Finances provides data on household net worth across age groups. Here are approximate median and average figures based on the most recent data:

Notice the large gap between median and average net worth at every age. This is because average figures are pulled up significantly by wealthy households. The median, which represents the middle household, is a more useful benchmark for most people.

Common Mistakes When Calculating Net Worth

Avoiding these common errors will give you a more accurate picture of your financial position:

• Overvaluing physical assets. That furniture set you bought for $3,000 may only be worth $400 on the resale market. Use realistic current resale values, not purchase prices or sentimental value.
• Forgetting small debts. A $500 medical bill, a $200 personal loan from a friend, or a buy-now-pay-later balance all count. Small debts add up.
• Using outdated home values. Real estate markets shift. Check recent comparable sales in your neighborhood or use a home value estimator for a current estimate rather than relying on what you paid years ago.
• Ignoring tax implications on retirement accounts. A $500,000 traditional 401(k) is not the same as $500,000 in a Roth IRA. The traditional account will be taxed at your income tax rate when withdrawn. For a more precise picture, some people estimate an after-tax net worth.
• Counting future income as an asset. Your salary, expected inheritance, or future Social Security benefits are not current assets. Only include money and property you have right now.
• Mixing household and personal net worth. Decide whether you are calculating individual or household net worth and be consistent. Married couples typically calculate household net worth combining both spouses.

How to Increase Your Net Worth

Growing your net worth comes down to two strategies: increasing assets and decreasing liabilities. Here are practical approaches for both:

On the asset side:

• Automate retirement contributions. In 2026, you can contribute up to $24,500 to a 401(k) and $7,500 to an IRA. Even small, consistent contributions compound dramatically over decades.
• Build an emergency fund. Having three to six months of expenses in savings prevents you from taking on debt when unexpected costs arise.
• Invest regularly. Even $100 per month in a low-cost index fund grows substantially over 20 to 30 years through compound returns.
• Increase your income. Negotiate raises, develop new skills, or start a side business. Extra income channeled into savings and investments accelerates net worth growth.

On the liability side:

• Prioritize high-interest debt. Credit card debt at 20% or more interest erodes your net worth fastest. Pay it off aggressively.
• Refinance when rates are favorable. Lowering your mortgage or student loan interest rate means more of each payment goes toward reducing principal.
• Avoid new consumer debt. Every dollar of new debt directly reduces your net worth. Use cash or debit for purchases when possible.

Last updated: February 23, 2026