What Is Net Worth
Net worth is the difference between everything you own and everything you owe. It is a single number that shows your financial position at a specific point in time. A positive number means your assets exceed your liabilities, while a negative number means the opposite.
How to Calculate Net Worth
List all your assets, such as cash, savings, investments, retirement accounts, and property market values. Then list all your liabilities, including credit card balances, loans, and mortgages. Subtract total liabilities from total assets to get your net worth. You can track these figures in a spreadsheet or a dedicated financial tool.
Why Tracking Net Worth Matters
Tracking net worth over time helps you see whether your financial health is improving or declining. It can reveal the impact of debt reduction, savings habits, and investment growth. Regular reviews make it easier to set realistic goals and adjust your budget or investment plan accordingly.
