How to Calculate Net Worth

Personal net worth is a number we should all know. Regularly calculating your net worth is not only a way to get a picture of your financial health but it's a great way to make and stay on track with financial goals. Read on for a simple way to calculate net worth.

Difficulty: Moderately Easy

Instructions

1. 

   Get organized. In order to calculate net worth, you will need to gather all of your financial documents. This includes bank statements, 401K and IRA statements, mortgage documents, credit card statements, home equity line statements, etc.

2. 

   Add up your assets. Simply add together everything you own: cash savings, 401K, IRAs, investment account funds, the current value of your home. You can also include any valuables such as jewelry, cars, artwork, and other items you have of value.

3. 

   Add up your liabilities. Simply add together everything you owe: credit card debt, mortgage, car loans, home equity loans, student loans, etc.

4. 

   Calculate net worth. Net worth is a simple calculation that compares your assets (what you have) to your liabilities (what you owe). Subtract your liabilities from your assets and you've got a snapshot of your net worth.