How to Calculate Your Personal Net Worth

calculate net worth

Knowing one's personal net worth is important in planning a secure financial future and making sure that the right credit decisions are made. What exactly is net worth? Personal net worth is the total amount of personal assets minus the total amount of liabilities.

Instructions

1. Calculating Assets. First to calculate personal net worth add up all your assets. Assets include stocks, mutual funds, banking accounts, checking accounts, vehicles owned, homes owned, boats, and other vehicles owned, antiques, collections, jewelry, money in your pockets.

2. Calculating Liabilities. Now calculate personal liabilities that you have at the moment. Personal liabilities include mortgages, loans, credit card debts, auto loans, taxes, and any other outstanding debts that are owed.

3. Net Worth. Now deduct the total liabilities from the total amount of your assets. If there is a plus value, this is a good thing. This shows control over finances and a positive net worth. Negative returns show a negative net worth. Financial experts state that it is a good idea to calculate one's personal net worth regularly to get a full view of their financial picture.