Determining your net worth is an easy formula, but getting all of the information together can be time-consuming.

It’s worth it.

You need to know your net worth. You need to know where you are starting. If you already know your net worth then you can skip this step.

How to Determine Net Worth

It’s a simple formula…

Assets – Liabilities = Net Worth

It’s that easy! So what are assets and liabilities?


Well, in short, an asset is anything you own that is worth money and/or generates money.

Examples of assets:

  • Cash
  • Investments
  • Your home
  • Automobiles
  • Jewelry

You got the idea?


A liability is anything that is costing you money; therefore, something like a house or a car can be an asset (because it is worth money) and a liability (if you still owe money on it).

Examples of liabilities:

  • Mortgage
  • Auto loans
  • Credit card debt
  • Medical debt
  • Student loans
  • Personal loans

Create a Balance Sheet

A balance sheet is simply a spreadsheet that lists all of your assets and all of your liabilities, which determines your net worth.

This is really as simple as writing down your assets and liabilities, then subtracting your liabilities from your assets, but if you like to be organized, here is a great balance sheet that you can use.

Most people get too complicated and end up putting too much information on their balance sheet. A balance sheet serves the purpose of calculating your net worth and that is exactly what this sample balance sheet does.

Resource: Sample Balance Sheet

Shortcut: Personal Capital can calculate your net worth for you.

Continue: SPEND – Know Where Your Money is Going

Series: Begin | Know | Spend | Pay | Give | Plan | Debt | Invest

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