What Is Net Worth?
Net worth is the value of everything you own minus everything you owe. It is a simple snapshot of your financial position at a specific moment. A positive number means your assets exceed your liabilities, while a negative number means the opposite.
How to Calculate Net Worth
List your assets, such as cash, savings, investments, and property. Then list your liabilities, including loans, credit card balances, and mortgages. Subtract total liabilities from total assets. You can track this calculation with a basic spreadsheet or a free online net worth calculator from Bankrate.
Why Net Worth Matters
Net worth helps you measure progress over time, compare your financial standing, and set realistic goals. It is widely used by financial planners and reported in household balance sheet data from sources like the Federal Reserve.
