How to Calculate Your Net Worth (with Example)
It’s important to know how to calculate your net worth. Knowing your net worth gives you a baseline reference on what it will take to meet your financial goals, both short- and long-term.
There are three basic steps to calculating your net worth:
Step 1: Add up all of your assets, including your bank account balances, your investment and retirement account balances, and the estimated value of your tangible assets (your cars, your house, other real estate, etc.).
Step 2: Add up all of your debts, including your credit cards, auto loans, student loans, mortgage balances, etc.
Step 3: Subtract your debts from your assets to obtain your net worth.
It has been quite some time since I calculated my own net worth, and with the revival of my personal finance and investing blog, See Me Get Rich, it seems like the perfect time to use use my own current assets and debts as examples to show how to calculate your net worth. Here it goes!
Example
Step 1: Add Up Your Assets
Real Estate: $460,415.00 (according to the Zillow estimate)
Vehicle: $21,297.00 (Kelley Blue Book Estimate)
Bank Accounts: $30,116.96
Retirement Accounts: $25,663.35
Total Assets: $537,492.31
Step 2: Add Up Your Debts
Mortgage: $214,989.51
Auto Loan: $28,241.09
Student Loans: $50,880.11
Credit Cards: $56,973.60
Total Debts: $351,084.31
Step 3: Subtract Your Debts from Your Assets
Net Worth = Total Assets ($537,492.31) − Total Debts ($351,084.31)
Net Worth = $186,408.00
