What net worth tells you
Net worth is the single clearest snapshot of your financial position: everything you own minus everything you owe. A positive number means your assets outweigh your debts; a negative one is common early in life when student loans or a new mortgage dominate. What matters most is the direction it moves over time.
Assets and liabilities
Assets include cash and savings, investments, the market value of property and vehicles, and anything else of resale value. Liabilities are what you owe — mortgage balance, loans, credit-card debt and other obligations. Use current market values and outstanding balances, not what you originally paid or borrowed, for a realistic figure.
Track it over time
A single number is useful, but the trend is what counts. Recalculating every few months shows whether saving, investing and paying down debt are moving you forward. Rising net worth is the clearest sign your financial plan is working.
Frequently asked questions
Should I include my home?
Yes — include its current market value as an asset and the remaining mortgage as a liability. The difference is your home equity, which is part of your net worth.
Is a negative net worth bad?
Not necessarily. It's normal when large loans are recent. Focus on the trend: steadily reducing debt and building assets turns it positive over time.
What is net worth?
Everything you own minus everything you owe. Add up your assets (cash, savings, property, investments) and subtract your debts.
How do I calculate my net worth?
List the value of all assets, list all debts, and subtract the debts from the assets. The result can be positive or negative.
Why track net worth?
It is the clearest single measure of financial health. Watching it over time shows whether you are building wealth or falling behind.