Written by Tamar Satov
Published Jun 26 | 7 minute read
Have you ever wondered how to measure your financial health beyond just looking at your bank account balance? Enter net worth—the ultimate yardstick for assessing your financial well-being. It's not just for the wealthy. Knowing your net worth is about understanding where you stand financially and how you can navigate successfully toward your goals.
Here's everything you need to know about net worth, including how to calculate it, what affects it, how to improve it and why you should be tracking it.
Net worth is defined as the total calculated value of your owned assets minus any liabilities you may owe.
In other words, if you were to sell all your belongings and use the proceeds—along with your existing finances—to pay off your debts, any amount left over is your net worth. If you still owe money at the end of that mental exercise, you have a negative net worth.
Your net worth can (and should!) fluctuate. It's merely a snapshot of your financial health at any given moment. As such, it's important to track your net worth over time to make sure it's trending upward and toward your financial goals.
The formula for calculating net worth is very simple:
Assets are what you own and liabilities are what you owe. To calculate net worth, these are some of the common assets and liabilities to include:
Outstanding balances on:
If you own a home that's worth $300,000, have $50,000 in savings and $20,000 in investments, your assets total $370,000.
If you owe $200,000 on your mortgage and $10,000 in credit card debt, your liabilities amount to $210,000. Therefore, your net worth would be $160,000:
There are many factors that influence net worth, including your investment decisions, spending habits and income. The state of the economy and stock market may also play a role. For example, investments in equities (including mutual funds and ETFs) can experience wild swings in value—especially during times of economic uncertainty. This impacts the asset side of an investor's net worth.
Similarly, if you're a homeowner, the market value of your home can go up or down in the short term due to the season, interest rates and real estate demand in your region.
Interest rates can also affect your net worth. When rates are high, savers earn more interest and borrowers pay more.
These fluctuating values are part of the reason why it's important to track your net worth over time. As long as you observe a trend of upward growth over time, you're moving in the right direction.
As mentioned above, calculating your net worth can provide an accurate picture of your overall finances at a given point in time. But the best way to measure your progress is to record and track your net worth regularly. Doing so will help you:
The Federal Reserve Board collects data on the net worth of U.S. families in its Survey of Consumer Finances, which is conducted every three years. The most recent report was issued in October 2023 using data from a 2022 survey. The overall median net worth was $192,900, which means half of U.S. families had a net worth less than that amount, and the other half had a net worth greater than that figure. Consult the charts below to see how your family net worth compares to your cohorts by income, age and education.1
Income Percentile (Median Family Income)
Median Net Worth
Less than 20 ($21,600)
$14,000
20–39.9 ($44,800)
$71,000
40–59.9 ($71,200)
$159,300
60–79.9 ($115,700)
$307,200
80–89.9 ($189,200)
$747,000
90–100 ($378,300)
$2,556,200
Age of Reference Person (Years)
Less than 35
$39,000
35–44
$135,600
45–54
$247,200
55–64
$364,500
65–74
$409,900
75 or more
$335,600
Education of Reference Person
No high school diploma
$38,100
High school diploma
$106,800
Some college
$136,500
College degree
$464,600
Your net worth isn't just a number—it's a reflection of your financial well-being. By understanding what it is, knowing how to calculate it and taking steps to improve it, you can continually monitor your financial health and empower yourself to make positive changes along the way. So, take the time to track your net worth, make adjustments as needed and watch as you progress toward your goals and a more secure financial future.
Want to learn more about improving your fiscal fitness? Check out these 5 Tips to Build a Better Financial Future.
Tamar Satov is a freelance journalist based in Toronto, Canada. Her work has appeared in The Globe and Mail, Today's Parent, BNN Bloomberg, MoneySense, Canadian Living and others.
1. Aladangady, A et al. Changes in U.S. Family Finances from 2019 to 2022. Board of Governors of the Federal Reserve System. October 2023.