Editorial note: This article is for informational and educational purposes only and does not constitute financial advice. Individual net worth outcomes vary significantly based on personal circumstances. Consult a qualified financial professional before making investment or financial planning decisions.
Calculating net worth takes three steps: list what you own, list what you owe, subtract the second list from the first. The hard part is not the math. It is remembering every account and every balance, and using consistent values so the number means something the next time you calculate it. This guide walks through both lists using the same asset and liability categories the Federal Reserve uses in its Survey of Consumer Finances, then works a full example.
Skip the manual math: use our free Personal Net Worth Calculator and get your number in a few minutes.
The formula
Net worth = Total assets − Total liabilities
That is the whole formula. Everything below is about doing the two additions correctly and consistently, not about a more complicated equation.
Step 1: List your assets by category
Work through each category below and write down the current value, not what you paid originally. If a category does not apply to you, skip it and move on.
- Cash and transaction accounts: checking, savings, and money market accounts.
- Retirement accounts: 401(k), 403(b), IRA, and similar accounts from current or past employers.
- Investment accounts: taxable brokerage accounts, individual stocks, bonds, mutual funds, and ETFs held outside retirement accounts.
- Real estate: your primary residence, second homes, and rental property, all at current market value.
- Vehicles: cars, motorcycles, boats, and similar, at current resale value, not purchase price.
- Business equity: your ownership stake in a business you run or hold a share of, net of any business debt.
- Other assets: cash-value life insurance (the cash value only, not the death benefit), and anything else with a clear resale value.
Step 2: List your liabilities
Now do the same for debt. Use the current outstanding balance on each, not the original loan amount.
- Mortgage balance: what you still owe on your primary residence and any other property, including home equity lines of credit.
- Student loans: federal and private balances combined.
- Auto loans: the remaining balance on any vehicle financing.
- Credit card balances: the total carried balance across all cards, not just the minimum payment.
- Other installment loans: personal loans, medical debt on a payment plan, and similar fixed-term debt.
Step 3: Subtract, with a full worked example
Here is a complete example that adds up from start to finish. This household has a home, a retirement account, a car, and typical debt.
| Line item | Amount |
|---|---|
| Assets | |
| Home, current market value | $350,000 |
| 401(k) and IRA combined | $140,000 |
| Checking and savings | $9,000 |
| Car, current resale value | $15,000 |
| Total assets | $514,000 |
| Liabilities | |
| Mortgage balance | $250,000 |
| Student loan balance | $18,000 |
| Credit card balance | $3,000 |
| Total liabilities | $271,000 |
| Net worth ($514,000 − $271,000) | $243,000 |
Every number in that table is a value you could pull from an actual account statement, a lender balance, or a comparable-sales estimate for the home. Nothing in the calculation is theoretical. If you want the reasoning behind why net worth is defined this way in the first place, see what net worth actually means.
What to include, and what to leave out
A few categories cause confusion, so it is worth being specific.
Pensions and Social Security: excluded, under the same definition the Federal Reserve uses. Both are future income streams rather than assets with a clear present-day value, so neither goes on the asset side of the ledger.
Cars: included, at current market value, which is almost always lower than the purchase price. A car bought for $30,000 three years ago might be worth $18,000 today, and $18,000 is the number that belongs in the calculation.
Your home: included, at current market value, not purchase price. If you bought a home for $300,000 and comparable homes nearby are now selling for $420,000, use $420,000. A recent appraisal, a lender's automated valuation, or several comparable recent sales in the area all work as reasonable estimates.
Employer stock options that have not vested or been exercised: generally excluded, since they cannot be reliably valued or accessed yet. Once vested and exercised, the resulting shares count as an investment asset.
How often to recalculate, and tracking it over time
A single net worth calculation is a snapshot. The more useful information comes from calculating it the same way at regular intervals and watching the trend. Quarterly works well for most people: it is frequent enough to catch meaningful shifts in account balances or home values, and infrequent enough that it does not turn into an anxious daily habit. Some people prefer a single date each year, often around a birthday or the new year.
What matters more than the exact frequency is consistency in method. Use the same source for your home's value each time (the same online estimate tool, for example), and update account balances from the same statements. A number that jumps around because the valuation method changed is not tracking real progress, just measurement noise.
Where your number lands
For context, the Federal Reserve's 2022 Survey of Consumer Finances puts median net worth at these levels by age:
| Age group | Median net worth |
|---|---|
| Under 35 | $39,000 |
| 35 to 44 | $135,600 |
| 45 to 54 | $247,200 |
| 55 to 64 | $364,500 |
The full breakdown, including mean figures and the 65-and-older brackets, is in our average net worth by age guide. To see your exact percentile rather than just which side of the median you fall on, our Net Worth Percentile Calculator runs the comparison for your specific age group. Once you have run the numbers above, the Personal Net Worth Calculator is the fastest way to keep the tally current the next time you recalculate.
Frequently Asked Questions
How do I calculate my net worth?
List every asset you own at its current market value, list every liability you owe at its current balance, add up each side, and subtract total liabilities from total assets. The result is your net worth. Our Personal Net Worth Calculator runs this same calculation for you.
What should I include as an asset?
Bank accounts, retirement accounts (401(k), IRA), taxable investment accounts, your home and any other real estate, vehicles at current market value, and business equity if you own a business. Use the Federal Reserve's SCF categories as a checklist so nothing gets missed.
Should I use my home's purchase price or current market value?
Current market value, not purchase price. Net worth measures what you would actually get if you sold an asset today, not what you originally paid. A home bought for $300,000 that is now worth $420,000 counts as a $420,000 asset. The same logic applies to a car, which typically moves in the opposite direction.
Are pensions and Social Security included in net worth?
No, not under the standard definition the Federal Reserve uses. Defined-benefit pension income and Social Security are future income streams, not assets with a set present-day value, so they are excluded from the SCF's asset categories and from most net worth calculations, including the ones on this site.
How often should I recalculate my net worth?
Quarterly is a reasonable default for most households, since it catches meaningful changes in account balances and home values without turning into a daily habit. Some people prefer once a year, on a fixed date. What matters more than the frequency is using the same method every time, so the trend line is comparable.
What is a good net worth for my age?
It depends heavily on age, income, and homeownership. The Federal Reserve's 2022 data puts median net worth at $39,000 under age 35, $135,600 for ages 35 to 44, and $247,200 for ages 45 to 54. Our full age-by-age breakdown covers every bracket with both median and mean figures.