Net worth is the total value of everything you own minus everything you owe.
TL;DR: Add up your assets, add up your debts, and subtract the second number from the first. The net worth calculator does the arithmetic so you can focus on filling in real values.
What counts as an asset
Assets are things with cash value that you could sell or spend. The usual list: money in checking and savings, the balance of investment accounts, retirement accounts like a 401(k) or IRA, the current market value of your home, and the resale value of vehicles.
Use today’s value, not the purchase price. A car you bought for $30,000 four years ago might be worth $14,000 now, so $14,000 is the number you use.
For a home, list the market value on the asset side. Say your house would sell for $400,000 and you still owe $250,000 on the mortgage. The $400,000 goes in assets, and the $250,000 mortgage goes in liabilities. The difference, $150,000, is your home equity, and that is the slice that actually adds to your net worth.
What counts as a liability
Liabilities are debts. Mortgages, car loans, student loans, personal loans, and credit card balances all belong here. Add up the current balances, not the original loan amounts.
Worked example. Assets of $90,000 in accounts plus $400,000 home plus $14,000 car comes to $504,000. Liabilities of $250,000 mortgage plus $18,000 in other loans comes to $268,000. Net worth is $504,000 minus $268,000, which is $236,000.
Reading the number
One ratio worth checking is debt to assets: total debt divided by total assets. In the example above that is $268,000 / $504,000, or about 53 percent.
There is no single “good” net worth. The number that means a lot at 25 means something different at 55, because younger people have had fewer years to save and pay down loans. Compare yourself to the median for your age group instead of a flat target. Run your figures through the net worth calculator once a year to track the trend.
This guide is informational and not financial advice.