How To Calculate Your Net Worth

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How To Calculate Your Net Worth

Posted By Daniel Stewart     November 20, 2020    


Calculating your net worth isn't just something reserved for ultra-wealthy celebrities sitting around with stacks of cash. Rather, knowing your net worth is a great way to assess your overall financial health. It can also give you a better idea of how you might improve.

If you're searching for ways to improve your financial status or you're working toward a goal like buying a house, car, or paying down debt, calculating your net worth can help you get there.

What Is Net Worth?

Net worth is the combined value of your assets minus the value of your liabilities. In layman's terms, it's the combined value of all your cash plus any items you own that you could sell for cash, minus any money you owe to another person or entity.

Examples of assets include:

  • Money in your checkings, savings, and retirement accounts
  • Your car
  • Properties you own
  • Investments
  • Your home
  • Jewelry

Examples of liabilities include:

  • Credit card debt
  • Personal loans
  • Student loans
  • Car loans
  • Mortgage loans

How To Calculate Your Net Worth

By far, the easiest way to calculate your net worth and meet your financial goals is to use a trusted personal finance management app. Many of these apps help you establish a baseline understanding of your financial health by gathering your personal information and preparing a budget for you. Calculating your net worth is often a part of this process. You can also tailor these tools to align with your spending habits, goals, and any fluctuating income.

Not Comfortable Using A Personal Finance Management App?

If you're not too keen on handing your personal information over to a personal finance management app, that's okay. You can also use online net worth calculators. These calculators will ask you to fill in various fields of information, including your assets and liabilities, and then do the math for you. Although easy, the only downside is that these calculators may not always be 100% accurate. You'll also want to make sure that whatever net worth calculator you are using is verified by a trusted and reputable online source. Some may be malicious and ask you for unnecessary personal details that could harm your financial security. If you need the best personal finance management app, visit this website.

However, if you have any hesitation about using a personal finance management app or online tools, there are alternative options. You can always opt to meet with a personal finance expert to discuss your net worth and financial goals.

Read a similar blog about personal finance software here at this page.