How to Calculate Your Net Worth

Calculating your net worth can be very easy, provided all of the necessary information is readily available. Doing this will help you when deciding whether to make major purchases.

Instructions

Difficulty: Moderately Easy

Things You’ll Need:

• Financial Statements
• Ledger Books
• Financial Calculator

1. List all of your fixed assets, such as real estate and cars, at their current value.
2. List all of your liquid assets: cash, certificates of deposit, stocks, bonds and bank accounts.
3. List all jewelry, furniture and household items at their current value.
4. Add together all of the above. These are your total assets.
5. Subtract all of your debts, such as your mortgage, car loan and credit card balances, from your total assets. The result is your net worth.
6. Reevaluate and update your net worth calculations on an annual basis.

Tips & Warnings

• Be realistic when evaluating the current value of your assets. Such information can be useful in determining whether you are adequately insured. Share the information with your insurance company to help you decide.
• It is advisable to use the after-tax value of your marketable securities (stocks and bonds) when calculating their value.