Net worth is the single most comprehensive snapshot of your financial position. It is calculated by subtracting everything you owe from everything you own — and unlike income, it reflects the cumulative result of all your financial decisions over time. Tracking it annually is one of the most useful habits in personal finance.
How to calculate net worth
Net worth = total assets - total liabilities. Assets include: checking and savings account balances, investment and retirement account balances, the current market value of real estate you own, vehicle values, business equity, and any other property of meaningful value. Liabilities include: mortgage balance, auto loan balance, student loan balance, credit card balances, personal loan balances, and any other money owed. Use current market values for assets, not what you paid. A house purchased for $250,000 now worth $380,000 counts as $380,000.
What net worth actually tells you
A positive net worth means you own more than you owe. A negative net worth — common early in adulthood, especially with student loans — means liabilities outweigh assets. The number itself is less important than the direction: is it growing each year? Is the growth rate outpacing inflation? Net worth is also more useful than income for comparing financial progress. Someone earning $60,000 who saves aggressively for 20 years can have a higher net worth than someone earning $120,000 who spends everything. Income is what flows in; net worth is what stays.
Average and median net worth benchmarks
According to the Federal Reserve's Survey of Consumer Finances (2022), the median US household net worth was approximately $192,700. By age group, median net worth rises from roughly $39,000 for those under 35 to $409,000 for those 65-74. These numbers include home equity, which is the largest component of net worth for most American households.
How to grow net worth
Three levers: increase assets, decrease liabilities, or both simultaneously. The most powerful approach combines income growth, intentional saving, and debt payoff. Home equity is often the largest single net worth component for homeowners — but it is illiquid. A balanced net worth includes liquid financial assets alongside home equity so you are not entirely dependent on the real estate market to access your wealth.
Frequently asked questions
Should I include my car in my net worth?
Yes, at current market value. Vehicles depreciate, so the asset value decreases over time. A car purchased for $35,000 with a $28,000 remaining loan and now worth $22,000 contributes negative $6,000 to net worth — the loan exceeds the current value.
How often should I calculate my net worth?
Annually is the standard recommendation — enough to see meaningful progress without getting caught up in short-term market fluctuations. Pick a consistent date and track it every year.
Sources and review notes
WalletCalcs uses official consumer finance, tax, labor, and banking references where possible. These links support the general educational guidance on this page;.