How To Calculate Your Net Worth online easily

How To Calculate Your Net Worth

Let’s discuss how to calculate your net worth, so that you can experience clarity around your financial situation and where you’d like to improve.

Finances and personal money management seem to incite a lot of fear and confusion in people.  

But it doesn’t have to. You see there’s a little-known secret regarding money management that I’m going to let you in on.  

It’s that managing your money is very easy once you have been taught the basics.

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That lack of education is where the fear, confusion and general negativity come from. Because if no one has ever taught you then how would you know what to do.  

Womends personal finance tips - How To Calculate Your Net Worth

First, What Is A Net Worth?

Your net worth is the amount of money you personally or as a household are valued at.

It’s your total assets minus your total liabilities. Assets are things you own that are positive money-wise.

  • Cash
  • Savings
  • Investments
  • House
  • Businesses (like owning revenue-generating websites)
  • Collectibles (like expensive watches)

Assets are things that if you had to liquidate them (a fancy work for sell) then they would give you cash, hence why cash is the ultimate asset. (

Ever heard of the saying, ‘cash is king’ that’s why…!

Liabilities however are the things that cost you money.

 To be honest all debts are liabilities. If you owe money it’s a liability.    

Why Would We Want To Calculate Our Net Worth First?

Wouldn’t Figuring Out A Budget Be A Better Idea?

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No, you need a starting point and calculating your net worth gives you a very good starting point.  

If you jumped in and made a budget right now a few issues would come up.

Firstly you may have more debt than you realize and that would need dealing with. If you don’t factor that into the budget then you will have some problems.  

Also, how do you know how much money you wish to save, or really what direction you want to go in with your money if you don’t know your current position?  

Now onto the good stuff.  

How To You Calculate Your Net Worth – Step By Step

The first step is to list out and add up all your assets. Then list out and add up your liabilities.

Next, minus your liabilities from your assets and that’s your net worth.  

As a formula that would look like:  

Assets – Liabilities = Net Worth 

Pretty easy. But don’t panic if you’re still confused, it can be difficult to understand a new concept.

We will go through a few examples and then I have a detailed action plan so you can work out your net worth.   

Use this net worth calculator to be sure!

Net Worth Examples

I always find I learn things much quicker when given examples because even if I don’t necessarily understand how someone’s explaining it I can usually work it out from their examples.  


 Jane lives alone in rented accommodation. She has just graduated with $30,000 in student loan debt.

However she has $2,000 in savings with her bank. She also has a credit card with $1,500 owed on it.  

So Jane’s assets are:  

  • Savings – $2,000 Total Assets = $2,000  
  • Jane’s liabilities are: Credit card debt – $1,500 Student loan debt – $30,000 Total Liabilities – $31,500  

Therefore Jane’s net worth would look like this:  

Assets of $2,000 – Liabilities of $31,500 = A Net Worth of -$29,500 

We can see Jane currently has a minus net worth. This would be reasonable to expect as she has just graduated.  

Now Jane has calculated her net worth she realizes that she needs to start paying debt off as a priority.

Rather than saving up for that super fancy car she likes.  


 John and Mindy have just brought their first house together. They are in their late 20’s so have been working a while.

The house was sold to them for $240,000. They used a deposit of $40,000 and got a mortgage for the remaining $200,000.

John has a car on finance, the car is currently worth $10,000 but he still has $8,000 left to pay. Mindy owns his car outright and it’s worth $6,000.

John has retirement savings of $30,000 while Mindy has retirement savings of $45,000. Mindy also has $15,000 in a savings account with his bank.  

Because John and Mindy have a house together they combine their finances and so we will work out their net worth as a household.

Some couples keep their finances separate in which case you would just work each person out in the same way we worked out example 1, Jane’s net worth.    

John and Mindy’s assets are:  

House – $240,000 John’s Car – $10,000 Mindy’s Car – $6,000 John’s retirement savings – $30,000 Malcolm’s retirement savings – $45,000 Malcolm’s savings – $15,000 

Total Assets = $346,000   John and Mindy’s liabilities are:   Mortgage – $200,000 John’s car loan – $8,000 

Total Liabilities – $208,000   Therefore John and Mindy’s net worth would look like this:  

Assets of $346,000 – Liabilities of $208,000 = A Net Worth of $138,000  So John and Mindy currently have a positive household net worth of $138,000.

Upon understanding their net worth they may decide they want to destroy their car loan and then start saving for early retirement.

Or they may decide to work hard at paying off both the car loan and the mortgage so they can go traveling and rent out their paid-off house for income.    

See how in both examples by calculating their net worth they could see where their money priorities lie much more easily.    

What Should I Include When Calculating Net Worth?

 Asset wise if the total value will not change significantly for a year, or will not be spent in a year (in the case of cash) then include it in the calculation.  

So if you save up money for Christmas each year, don’t include those savings in your net worth because it’s going to be spent within the same year.  

For liabilities, the value change within a year does not apply. Basically whatever your liability is on the given day that you work out your net worth use that number.

Make sure to include any money owed even if you plan on paying it all off the following month or something. It still needs to be included.   A note on cars: Cars can be tricky when calculating your net worth.

Because a car’s overall value can change dramatically in a short space of time and upkeep costs can virtually cancel out the car’s value. Therefore some people do not include cars as an asset at all.

But even if you decide not to include the car as an asset you must still include a car loan as a liability.

Because you will have to pay back that money regardless of the value of the car.    

Net Worth Action Steps

 Step 1:  Grab some paper, a pen and a calculator or bring up a blank excel spreadsheet.  

Step 2:   Write down all your assets and their value.  

If you are unsure of something’s value its always better to underestimate than overestimate.

What you can always do is hop onto a website that sells whatever your trying to guess the value of and see what an item, with the same age and condition as your own retails at.

So if you have a car, go onto a used car sales website (the bigger the better) input your cars make, model, mileage, age, condition etc and see what other cars similar are selling for.

You can do this with virtually anything including houses, but house-wise, because the value can be so high, its probably best to get a valuation done by a proper agent.   

Step 3:   Add up all your assets to find your total assets.   

Step 4:   Write down all your liabilities and their value.   You may need to go through paperwork, or call up and find out exactly what you owe to everyone.  

If you have been getting into debt but have kept your head in the sand about exactly how much, now is the time to call up and see the exact numbers.

It might be a bit scary but it’s far better to find out now than 6 months down the line when the debt could be even larger.  

Step 5:   Add up all your liabilities to find your total liabilities.   

Step 6:   Minus your liabilities from your assets giving you your net worth.   *Please see the two examples further up the page if confused, or comment below.

How To Calculate Your Net Worth – Conclusion

Well done you should now have calculated your net worth! Don’t worry about the numbers you’re looking at now because remember this is just your starting point.

We will have those finances in ship shape in no time!    

So that’s it for your first lesson in money management. Please comment below or share the post if it has helped you out, because that would really help me out!    

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