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A few weeks ago, I was talking with a client who said something I hear all the time: “I know I should know my net worth… but honestly, I’m a little afraid to look.”
I get it. For a lot of people, the phrase “net worth” conjures up images of billionaires on magazine covers or a number that somehow defines whether you’re “doing okay.” But that’s not what it is at all.
Your net worth is simply what you own minus what you owe. That’s the whole formula. It’s not a grade. It’s not a verdict on your character. It’s just a snapshot of where you stand today, so you can make better decisions going forward.
In this newsletter, I want to walk you through exactly how to calculate yours the same way I’d walk you through it, sitting across from you at the kitchen table. No jargon. No judgment. Just a clear, low-stress process you can finish in about 20 minutes with a cup of coffee.
And if you’d rather watch than read, I recorded a companion video where I share my screen and walk through the net worth calculator on our website step by step. The link is at the bottom of this article.
Why This Number Matters More Than You Think
Most people track the wrong financial numbers. They check their checking account balance obsessively. They glance at their 401(k) when the market makes the news. They stress about a credit card balance for a week and then look away.
Each of those numbers tells you something, but none of them tells you the whole story. Your net worth does.
It pulls every piece of your financial life onto a single page: the house, the cars, the retirement accounts, the savings, the mortgage, the credit cards, the student loans. When you can see all of it together, patterns start to show up that you simply cannot see one account at a time.
A positive, growing net worth tells you that the choices you’re making: saving, paying down debt, investing, are working. A flat or declining one is information too. It’s not failure; it’s a signal that something deserves your attention.
I’ve never met anyone who regretted knowing their number. I’ve met plenty of people who regretted waiting.
What You’ll Need Before You Start
Before you sit down, gather a few things. You don’t need every statement going back ten years, just current balances. Pull these up on your phone or laptop:
• Your most recent checking and savings statements
• Your investment and retirement account balances (401(k), IRA, brokerage, HSA)
• A reasonable estimate of your home’s value
• A rough value for your car (Kelley Blue Book is fine)
• Current balances on your mortgage, student loans, auto loans, and credit cards
That’s it. You don’t need a cost basis. You don’t need original purchase prices. You don’t need a financial planner or a fancy spreadsheet. Just today’s numbers.
Walking Through the Calculator, Step by Step
On our website, we have a complimentary, private net worth calculator that does the math for you. I’ll use a sample household as we go so you can see how the numbers come together. Plug in your own as you follow along.
Step 1: Cash and Cash Equivalents
Start on the left side of the calculator with your assets. The first category is what I call your “ready money,” the cash you could put your hands on quickly if you needed to.
This includes:
• Checking accounts
• Savings accounts
• Money market accounts
• CDs
If you have a few different checking accounts, don’t overthink it. Add them up and enter one total. For our example, household, we’ll enter $15,000.
This section tells you something important: how much breathing room you have if life throws a curveball, a car repair, a medical bill, or a slow month at work. Most financial advisors, myself included, want to see three to six months of expenses sitting in this category and more if you are about to retire.
Step 2: Investments and Retirement Accounts
Next, move to your long-term money. This is where you’ll list:
• Brokerage or taxable investment accounts
• 401(k), 403(b), or similar workplace retirement plans
• Traditional and Roth IRAs
• HSAs you’re treating as long-term investments
Log into each account and look for the current value, often called the “account value” or “market value.” For our example, we’ll enter $300,000.
A quick mindset note here. We are not tracking what you contributed. We are not tracking its value at the peak of last year’s market. We’re capturing what it’s worth today. Markets move up and down. Your snapshot will too. That’s normal, and it’s exactly why we update this number over time instead of obsessing over it day to day.
Step 3: Real Estate and Personal Property
Now move to the bigger, harder-to-price assets:
• The estimated value of your home
• Any rental or vacation property
• Land or other real estate
• Vehicles
• Jewelry, collectibles, and art
For your home, use a recent appraisal, your tax assessment, or a reasonable estimate based on recent sales in your neighborhood. It doesn’t have to be perfect. We’ll use $600,000 for our example.
For vehicles, Kelley Blue Book gives you a workable number in about two minutes. We’ll use $25,000.
For jewelry, collectibles, and art, here’s a tip I share with every client: if you haven’t had these items appraised in a long time, this is a great moment to do it. With the inflation we’ve seen in recent years, the replacement value of many items has quietly climbed, which means your renter’s or homeowner’s policy may no longer fully cover you. For today, we’ll enter $20,000.
Once those are in, the calculator totals up your assets on the right side. For our example household, that comes to $960,000.
Step 4: Liabilities — What You Owe
Now we move to the other side of the equation. This is everything you owe:
• Mortgage balance: $200,000
• Student loans: $10,000
• Auto loans: $12,000
• Credit card debt: $8,000
• Other long-term installment loans (buy-now-pay-later, personal loans): $1,000
I want to pause here because this is the section where people get most uncomfortable. That’s normal. Seeing all your debts in one place can feel heavy. But remember, you cannot improve what you refuse to look at. Awareness is not the same as judgment.
Use the current outstanding balance, not what you originally borrowed. If you’re not sure whether to include something, don’t get stuck. Make your best guess now and refine it later. For example, total liabilities come to $231,000.
Step 5: Your Net Worth
Once you’ve entered everything, the calculator shows three numbers: total assets, total liabilities, and your net worth.
For our example household:
• Total assets: $960,000
• Total liabilities: $231,000
• Net worth: $729,000
If your number is positive, you own more than you owe. That’s a good place to be, and worth acknowledging.
If your number is negative, you are not alone, and it does not mean you’re failing. It means your debts currently outweigh your assets, and that is something we can work on, one step at a time. I’ve sat with plenty of people who started in the red and built genuine wealth from there. The number isn’t the story. The direction is.
What to Do With Your Number
Calculating your net worth is the easy part. Using it well is where the real benefit kicks in.
My suggestion: write the number down somewhere you’ll see it again. A notebook, a note in your phone, a saved PDF, whatever works. Then update it every six months, or at a minimum, once a year. After two or three checkpoints, you’ll start to see the trend line. That trend line is more important than any single snapshot.
If you’re married or partnered, walk through this together. I encourage couples to hold a 30-minute monthly money meeting. The net worth statement is a perfect place to start, because it lifts the conversation out of the weeds, “did you really need that?” and into the big picture. You’re both looking at the same dashboard, on the same team.
If your number raises questions, how do I tackle this debt, how much should I be saving, am I on track for retirement, when should I start Social Security, that’s exactly the work my team and I do with clients every day. The net worth statement is often the first page of a much more interesting conversation.
A Few Common Questions
What if my net worth feels embarrassingly low?
Then you’ve just done the bravest thing a lot of people never do, you looked. I’ve worked with surgeons making $700,000 a year with a negative net worth, and teachers making $55,000 a year with a healthy positive one. Income is not net worth. Habits are. You can change habits.
Should I include my pension or Social Security?
Not on the standard net worth statement. Those are income streams in retirement, not assets you own outright. We account for them separately in retirement income planning, which is a different and equally important exercise.
How accurate do my estimates need to be?
Close enough is good enough. The point isn’t precision to the dollar; it’s consistency over time. If you use the same method for your home value every year, the trend will be honest.
Your Number Is Waiting
Progress in your finances doesn’t come from one heroic decision. It comes from small, repeatable steps, the kind you can actually keep up with for the next twenty years. Knowing your net worth is one of those steps. It takes 20 minutes the first time and 10 minutes every time after that.
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