FREE WORK PLANNER
Wondering how to calculate net worth? Here's an easy worksheet to help you determine your net worth today!
How to Calculate Net Worth
Note: this Net Worth Worksheet can be found in our Money Planner which we'll be using throughout the month of Finance February as we work on our budgets and taking care of our finances all month long! Learn more about the Money Planner over HERE.
Curious how to determine your net worth? This Net Worth Worksheet will make it easy to truly see a clear picture of your financial goals over time! It's easy to do, takes just a few minutes to fill in, and will give you clear direction on where to focus your efforts when planning for your family's future.
So what even is your net worth? What do the words “net worth” even mean?
Your net worth is a simple way to calculate the overall value of your finances. Simply put, you add up all of your assets (everything you own), subtract all of your liabilities (everything you owe), and come up with a number that clearly defines exactly how much money you truly have.
It only takes basic math skills to determine your net worth. Here's how it looks:
- Add up all of the things you own (home value, checking accounts, savings accounts, investments)
- Subtract out any money you owe (your mortgage, any car loans, student loans, etc.)
- Whatever is left is your NET WORTH
Why does figuring out your net worth matter?
Knowing your net worth matters because it gives you a clear picture of your finances so that you can determine where you want to head next. My husband started calculating our net worth way back in 1996 when we were first married (um, forever ago!) and each year in January we review all of our accounts to see where we've been, where we're currently at, and where we're going.
Looking back, it's been the single most important process we've done annually for our finances, because in the back of our minds all year long as we're considering any major financial decisions, we're thinking about that net worth. Want to splurge on a $2,000 TV? Maybe not if that $2,000 instead could go towards paying off a student loan. Thinking we really need that $7 overpriced Starbucks? Not if that money could work more wisely towards a bigger long term financial goal.
Clearly knowing what we have, where we're heading with our finances, and dreaming about what we want in the long run with our money has allowed us to dream bigger than we could have ever imagined back when we were just starting out at 20 and 24.
So, how do you determine your net worth?
Start by listing your assets first ~ here are a few to get you started:
- Checking account #1
- Checking account #2
- Savings account #1
- Savings account #2
- Primary residence value
- Rental property value
- Vehicle value #1 (search here)
- Vehicle value #2
- 401k value
- Additional investments
Then, total up your liabilities:
- Vehicle loan #1
- Vehicle loan #2
- Credit card #1
- Credit card #2
- Student loan #1
- Student loan #2
- Additional liabilities
Next, subtract your total liabilities from your total assets to come up with your net worth. Easy peasy, right?
How often should you calculate your net worth?
We personally choose to calculate our net worth once a year, just after the first of the year. We've kept a spreadsheet now for a whopping 26 years with our net worth, and it's kind of fun to look back and see where we've started from. You may want to calculate it twice a year if you're just starting out to help motivate yourself as you begin.
What if my net worth is negative?
If your net worth is negative . . . it is okay. (Everyone has to start somewhere!) If you're in that place today, start right away to transform your finances today. Here are a few posts to get you started:
- How To Save When There's No Money Left
- 3 Tips to Help You Save On Your Grocery Bill
- Biggest Grocery Budget Busters
- 10 Secrets to Saving on Kids Clothes
- 7 Simple Ways To Save Money On Fuel
- 9 Secrets To Save On Medical Expenses
Would having a place to physically keep track of your finances help you stay on track? Head on over to learn more about the Money Planner (it includes 10 budget envelopes to help you stay on track) or the Money Planner PDF files, and keep up with your finances all month long right alongside us for Finance February. I'm on this side of the screen promising you it is so worth it, and I can't wait to see YOU win at your finances in 2022!