How to calculate your net worth
Net worth is the single clearest number for your financial health. Here's the formula, what to include, and how to track it over time.
The net worth formula
Your net worth is what you own minus what you owe:
A positive number means your assets outweigh your debts. A negative number is common early in life (student loans, mortgage) and improves as you pay down debt and grow savings.
Step 1 — List your assets
Assets are everything you own that has real market value:
- Cash in checking and savings accounts
- Emergency fund and money-market balances
- Investment accounts (brokerage, 401k, IRA, Roth)
- Retirement and pension balances
- Home equity (market value − mortgage owed)
- Vehicles at current market (not purchase) price
- Valuables you would realistically sell — jewelry, collectibles
Tip: use conservative market values. Zillow for the home, KBB for vehicles, current statement balances for accounts.
Step 2 — List your liabilities
Liabilities are every dollar you owe:
- Mortgage principal remaining
- Auto loans
- Student loans
- Credit-card balances (statement balance, not the limit)
- Personal loans and lines of credit
- Medical or tax debt
Step 3 — Subtract
Add up your assets, add up your liabilities, then subtract. That number is your net worth today. It's a snapshot — not a grade. What matters is the direction it moves over months and years.
Step 4 — Track it monthly
Update the numbers once a month, on the same day if you can. Watching the trend line — not the daily balance — is the single best way to see whether your money habits are working.
Finrayan does this automatically. Log your accounts, bills, savings, and debt once, and the dashboard shows your net worth trend over time alongside cash flow and goals.
Common questions
Should I include my primary home?
Yes — at fair market value, minus the mortgage balance. Some people prefer to track "liquid net worth" separately by excluding the home; both views are useful.
What about my car?
Include it at current resale value, not the sticker price you paid. Depreciation is real.
How often should I recalculate?
Monthly is enough for most people. Weekly is fine if you enjoy the ritual — anything more frequent turns into noise.