Financial Literacy

Net worth calculator: Calculating your financial net worth

Calculating your net worth can be a potentially scary task, as it is going to require you to come to terms with exactly how much you owe. You might feel safe and secure in your home, but you may owe more than your house is worth. Calculating your net worth will force you to address your financial situation. Yes, you may end up with a negative number. The first time I calculated my personal net worth, it was -$13,000.27! However, one must first find where they are at before they can determine where they are going. There is no point in setting a goal for a financial net worth of $15k next year if you’re $300k in the hole.

Why calculate net worth?

Your net worth will provide you with a good overview of your financial health. You can use the net worth calculator below to determine if you need to start working hard to repay debt, or if you’re sitting pretty comfortably. There is no magic number that you’re trying to achieve, but it will be a solid, firm number that you can look at.

Net Worth Calculator: Calculating Your Financial Net WorthIn addition, this number is then something that you can track over time. It can be a rewarding motivational tool as you watch yourself climb out of debt and towards a positive net worth. It can remind you why you’re working so hard to save money for the future, so that you can live off your investments. You may set yourself a goal of a certain net worth, and every year you can watch yourself get that much closer to your goal.

There aren’t too many people that have taken the few minutes necessary to calculate their net worth. As a result, they are running around in the dark, trying to save money or reduce debt, but not entirely sure why. Even worse, there are those that try and try and try to save money or pay off their debts, but they don’t feel like they’re making any progress. If they were tracking their net worth, they might be able to see the light at the end of the tunnel, or feel better about themselves, but instead they quit because they haven’t seen or felt any difference.

So calculate your net worth – not for the sake of comparing to others or bragging rights, but just so that you have a baseline that you can track. This is ground zero, the starting line, the turning point. From here, you will see progress, so check it now, and once every few months just so you can see that yes, you are making progress, even if it is slow.

How do I calculate my net worth?

Gather your financial information and be conservative when estimating your property and vehicle value. While they may feel like a million bucks, they probably aren’t worth it. Check local listings in your neighborhood to get an accurate assessment of what properties around you are listing at. If in doubt, guess low. This isn’t a contest, or a feel good program. This is about accurately estimating your net worth so that you have a good understanding of the truth – not of your dreams or desires. Similarly, check craigslist and local newspapers for vehicles of your year, make, and model to see what they are selling for. Take an average or guess low.

Then, all you need to do is use the net worth calculator too add up your assets, subtract your liabilities, and see what number you end up with. How does your net worth look to you? Is it scary or comforting? Will it inspire action?


  1. krantcents

    Net worth is an important benchmark to measure your progress financially. I usually leave out home, vehicles and furniture out of my net worth because I am measuring my investments. I do not view those things as investments.

  2. Insurance Hunter

    This is a great tool and something that more people should use when assessing their finances. Using the tool quarterly or even yearly to assess your situation will definitely tell you if you are on the right track.

  3. Bryan Jaskolka

    krantscents, how is your home not an investment? Even if you’re still paying off a mortgage, the chances are good that you have at least a little bit of equity sitting in it. Regardless of whether you’re going to sell or not – ever – doesn’t really matter because it’s still something of huge worth that you own. I can see a vehicle, as those depreciate very quickly, but I just don’t understand the viewpoint of not owning a home an investment. It’s at least an asset if nothing else, and that gets calculated into your net worth.

    • Anton Ivanov

      It’s somewhat a matter of personal preference as far as what you consider an asset and an investment. Although there is a potential for value appreciation, a home generally does not generate you any income and your increases in equity only serve to offset your mortgage debt.

      Another thing to consider is that you cannot extract the equity out of your home and use it for other purposes (a home equity loan doesn’t do you any good). An investment generally gives you some form of return and can be cashed for money. You will always need your home to live there.

Leave a reply

Your email address will not be published. Required fields are marked*