How to calculate your net worth, and why the trend matters
This article is general information, not financial, tax or legal advice. Rules and rates differ by country and change over time; the figures here illustrate the mechanics. For decisions involving real money or legal obligations, check the current official rules or consult a professional.
Your net worth is the total value of everything you own minus the total of everything you owe. If you sold every asset at today's value and paid off every debt, it is what would be left. It is the clearest single measure of whether you are getting ahead financially, which income on its own does not show. The net worth calculator adds it up for you and keeps snapshots so you can see it change.
The formula
Net worth = total assets − total liabilities. Assets are things with a money value you could realistically convert to cash. Liabilities are debts you are obliged to repay. A business calls the same thing equity on its balance sheet, and the personal version works exactly the same way. Net worth can be negative, and early in adult life it often is.
Valuing your assets
Use today's realistic value, not what you paid:
- Cash and savings: current balances.
- Investments: today's market value of funds, shares and other accounts.
- Retirement and pension pots: the current value on your latest statement. Pensions that pay a set income rather than a pot are harder to value, so many people track them separately.
- Your home: a realistic sale price from recent local sales, not the most optimistic estimate. Some people subtract the cost of selling to be conservative.
- Vehicles: what they would sell for now, which is usually much less than the purchase price.
- Other property, business stakes and valuables, only if they have a real resale value.
Leave out future income, expected inheritances and everyday possessions such as furniture and clothes. They matter to your life but would add noise to the number.
Listing what you owe
Use the amount needed to clear each debt today, not the original loan or the monthly payment: the outstanding mortgage balance, car and personal loans, student loans, credit card balances (the current balance, not the minimum due), overdrafts, buy-now-pay-later plans and money owed to family. A lender's settlement figure is the most accurate number for a loan.
A worked example
Suppose you have 4,000 in a current account, 8,000 in savings, a pension worth 35,000, a home that would sell for about 280,000 and a car worth 9,000. Total assets: 336,000. Against that you owe 210,000 on the mortgage, 6,000 on the car loan, 18,000 in student loans and 1,500 on a credit card. Total liabilities: 235,500. Net worth is 336,000 − 235,500 = 100,500.
The calculator also shows that debt is about 70% of assets and that only 12,000 is liquid (cash and savings). Most of the net worth is home equity of 70,000 (280,000 minus the 210,000 mortgage). Without the home, net worth is 30,500, which is a better guide to how much flexibility you actually have.
Reading the number
A single figure invites comparison with other people, which is rarely useful: age, country, housing costs and whether someone has a pension that pays a set income all change what is typical. Two things matter more. The first is composition: a high net worth tied up in one house is less resilient than the same amount spread across cash, investments and pensions. The second is direction. A negative number is normal with student loans or a new mortgage, and it improves every month you pay down principal; How mortgage amortization works, and why overpaying early matters shows how the principal share of a mortgage payment grows over time.
Tracking it over time
Update your figures every three or six months, using the same valuation method each time, and save a snapshot. The calculator keeps a table of snapshots with the change since the last one, so you can separate what you controlled (saving and paying down debt) from what you did not (house prices and markets). It stores everything in your browser only and uploads nothing, which matters for data this sensitive; the trade-off is that clearing your browser data erases the history, so note the totals somewhere safe. To improve the trend, the budget planner finds money to save, the debt snowball calculator plans debt repayment and the retirement calculator projects the pension line. How much should you save for retirement? Working out your number covers what that line needs to become.
Sources and further reading
The claims in this guide rest on these references, which were checked when the guide was last updated. Spotted an error? The contact page says how to report it.