4 min read
How to Measure Net Worth: Easy Steps to Calculate Your Financial Health
-
-
Copied link to Clipboard!
Your net worth all comes down to assets and debts. Everyone owns a few assets and you may have a few debts or liabilities as well. Calculating your net worth shows you how much you’re worth in terms of dollars and cents. It’s how much you own or have minus everything you still owe. Use this simple guide to learn how to calculate your net worth.
Lesson Notes:
- Your net worth can be an indicator of your financial health. Ideally, your net worth should grow over time as you save more and pay down debts.
- Your net worth can be calculated by subtracting all of your debts and liabilities from your assets.
- You may have items that are intangible or difficult to sell that may be excluded from calculations used by financial institutions to determine loan eligibility.
LESSON CONTENTS
What Does It Mean to Calculate Your Net Worth?
You can calculate their net worth by adding up all your assets while subtracting their outstanding liabilities from the total. Regardless of where you are in life, you may be curious to learn how much you’re worth — at least on paper.
There are several good reasons to calculate your net worth. A financial institution may ask for your net worth when evaluating your application for a home, business or auto loan. Calculating your net worth gives the bank or credit union an idea of how much you’re worth if you default on the loan.
You may need to calculate your net worth when signing a prenuptial agreement, meeting with an accountant or financial planner or paying your taxes. Many businesses regularly generate net worth statements to send to investors and regulators.
Your net worth can also be an indicator of financial health. Most people tend to grow their net worth as they pay down debt, save more and receive salary increases. You may want to keep tabs on your net worth as you start saving for retirement as well.
Simple Net Worth Calculation
A simple net worth calculation means adding up your total assets and subtracting your debts, often referred to as liabilities.
Assets include everything you own, including how much money you have in your checking or savings account, real estate equity, savings and investment plans and items with a clear market value (car, jewelry, clothes, art, etc.).
Liabilities include all outstanding debts, including the remaining balance on your home, car, business or personal loan, credit card debt, student loans, back taxes and anything else you still owe.
To calculate your net worth, use the following equation:
ASSETS – LIABILITIES (DEBTS) = TOTAL NET WORTH
With Ent's Money Insight, users have the ability to track all their accounts in one place to visualize their current net worth and watch it adjust over time.
Tangible Net Worth Calculation
Your tangible net worth is something different. Some people own what is known as “intangible possessions,” or items that would be difficult to sell. Most possessions are tangible, which means they are physical and capable of being held. They also have a clear market value.
Intangible possessions are items that don’t exist in physical forms, such as intellectual property (IP), trademarks, websites, certain businesses and patents. These items have value but selling them requires a certain amount of expertise.
If you own intangible possessions, you may need to calculate your tangible net worth, which means removing these possessions from your total net worth.
Your tangible net worth will always be lower than your simple net worth. So why would you subtract these kinds of possessions?
Financial institutions often ask for tangible net worth instead of simple net worth to get a better idea of how much they can expect to recoup by selling your assets should you default on a loan. They may have trouble selling your IP, trademarks and other intangible assets. Some of these items may take months to sell on the market, assuming there’s a buyer. Calculating their true value may also be up for debate.
To keep things simple, credit unions and banks often rely on tangible net worth when evaluating loan applicants. Cars, homes, jewelry, and other items are easy to sell with clear values, making them a tangible part of your net worth.
If you are looking to calculate your tangible net worth, use the following equation:
ASSETS – LIABILITIES (DEBTS) – (INTANGIBLE ASSETS) = TOTAL TANGIBLE NET WORTH
Increasing Your Net Worth
Once you’ve calculated your net worth, you should have a good idea of where you stand financially. The goal is to have a positive net worth, meaning your assets are worth more than your debts. However, if you owe more than you own, you will have a negative net worth.
Don’t be discouraged if your net worth is in the red or not as high as you’d like it to be. Creating a budget can help you save more every month, so you can get out of debt, build wealth and start investing.
*PLEASE NOTE: This article is intended to be used for informational purposes only and should not be considered financial advice. Please consult your own financial advisor, accountant or other financial professional to learn more about what strategies are appropriate for your situation.
Related Resources
View All
4 min read
Teaching Kids Smart Money Habits in a Digital-First Economy
Money used to be easier to explain because kids could see it, hold it, and count it. Now, many purchases happen with a tap, swipe, or saved card number, which makes teaching kids about money more important than ever.
5 min read
HELOC vs. Cash: How to Pay for Home Maintenance Wisely
Home maintenance rarely arrives on your schedule, it can be abrupt and expensive. Research from Zillow and Thumbtack shows that annual maintenance costs are significant, averaging $10,867 a year (Kelleher, 2025). That is why the Home Equity Line of Credit (HELOC) versus cash question matters. It is not just about the repair bill; it is about what the decision does to your savings and cash flow.
5 min read
Comparing Budgeting Apps and Spreadsheets for Student Money Management
As a student, your monthly finances are rarely neat. Your income might come from part-time work, financial aid, or family help, while expenses can jump around from books to rent to social plans. That is why a student budgeting system that’s simple enough to use consistently is key.
6 min read
How to Audit Subscriptions and Cut Hidden Monthly Costs
Subscriptions are meant to make life easier; one click, one monthly charge, and you’re done. However, often they complicate your financial situation. The convenience of signing up and automatic payments can make it hard to notice what you are still paying for later. This guide shows you how to audit subscriptions and cut subscription costs without feeling deprived.
4 min read
How to Use Your Tax Refund to Strengthen Your Finances
A tax refund is a rare lump sum that can change your next few months. The trick is deciding what to do with it before it arrives. If you’re weighing what to do with your income tax refund or how to use tax refund money well, use a simple order: savings, debt, then future goals.
5 min read
How to Organize and Simplify Your Financial Apps This Spring
Spring cleaning isn’t just for closets; money apps also form digital clutter. They overwhelm you and your phone with extra logins, duplicate tools, and alerts that drown out what matters. This guide will help you organize financial apps so your setup feels lighter and more in control.
4 min read
How to Choose a Financial Institution That Supports Your Goals
Opening an account and running transactions is straightforward. However, choosing a credit union that still fits when life changes takes more thought. A strong financial partner does more than hold money. It strengthens your financial health with clarity and long-term support.
6 min read
Why Updating Beneficiaries And Your Digital Legacy Matters
Most people do not deliberately ignore updating beneficiaries and digital legacy; revising this information is simply easy to postpone. Still, taking time to update beneficiaries and think through digital legacy planning can reduce confusion and protect your loved ones. It’s the right financial safety check for real peace of mind.
8 min read
How a Spring Cleaning Yard Sale Can Teach Kids Real-World Money Skills
Spring cleaning usually starts as a “clear out the closets” kind of weekend. But once you stack up toys, books, and sports gear your family no longer uses, you’ve also got something else: a hands-on money lesson. A yard sale turns “stuff we’re done with” into a mini marketplace where kids can see how decisions, effort, and price connect.
8 min read
Family Focus: Compound Interest and How to Explain it to Teens
Compounding happens when money earns interest, and that interest stays put long enough to earn more interest. If you remember one thing about compound interest for teens, remember this: time can do a lot of the heavy lifting. Start learning about financial literacy for teens now to make saving, managing debt, and achieving future goals easier.
8 min read
Inflation Hacks: How Credit Card Rewards Can Help Offset Rising Everyday Costs
Inflation continues to show up in groceries, fuel, and other bills, as the latest report showed. The Bureau of Labor Statistics (BLS) noted, “The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent on a seasonally adjusted basis in December,” and prices were up 2.7% over the prior year (BLS, 2026). Consumers need practical ways to offset these rising costs, and credit card rewards are one method that can help. This article explains how.
10 min read
Smart Habits for Building Generational Wealth Over Time
Generational wealth doesn’t start on an equal playing field. Some inherit opportunities, while others inherit barriers that can be shaped by discrimination and trauma. No matter where you start, though, wealth-building is still possible by learning from the past and taking steps that help the next generation carry less weight. This article breaks down practical, realistic generational wealth strategies. These tips will work whether you’re starting from scratch or rebuilding after setbacks. As you read, keep one idea in mind: wealth is less about what you earn and more about what you keep, protect, and pass on.