Your net worth is a fundamental measure of your financial health. It represents the difference between what you own (your assets) and what you owe (your liabilities) at a specific point in time. In essence, it's a snapshot of your overall financial standing. Calculating your net worth regularly is crucial for tracking progress towards financial goals, understanding your financial resilience, and making informed decisions about your money.
The formula for calculating net worth is straightforward:
Net Worth = Total Assets – Total Liabilities
What are Assets?
Assets are items you own that have monetary value. They can be converted into cash. It's important to list all your assets, regardless of how small they might seem, and to estimate their current market value as accurately as possible.
Cash and Cash Equivalents: This includes money in checking accounts, savings accounts, money market accounts, and certificates of deposit (CDs).
Investments: This category covers stocks, bonds, mutual funds, exchange-traded funds (ETFs), cryptocurrency, and any other investment vehicles.
Retirement Accounts: Funds held in tax-advantaged retirement plans like 401(k)s, IRAs (Traditional and Roth), and pensions.
Real Estate: The estimated current market value of any properties you own, including your primary residence and any investment properties.
Vehicles: The resale value of cars, boats, motorcycles, RVs, and other vehicles.
Personal Property: Valuable items such as jewelry, art, collectibles, and expensive electronics. Estimate these realistically based on what you could sell them for.
Other Assets: Any other valuable items or claims you have, like business ownership stakes or outstanding loans owed to you.
What are Liabilities?
Liabilities are your debts and financial obligations – essentially, what you owe to others. These are subtracted from your assets to determine your net worth.
Credit Card Debt: The total amount you owe on all your credit cards.
Loans: This includes student loans, auto loans, personal loans, payday loans, and any other installment loans.
Mortgages: The outstanding balance on your home loan(s).
Other Debts: Any other outstanding financial obligations, such as medical bills, tax debts, or money owed to family members.
How to Use This Calculator
This calculator is designed to be a simple tool to help you get a quick estimate of your net worth.
Input Your Assets: Enter the current estimated value for each asset category in the "Assets" section. Be honest and realistic with your valuations.
Input Your Liabilities: Enter the total outstanding balance for each type of debt in the "Liabilities" section.
Calculate: Click the "Calculate Net Worth" button.
Review Result: The calculator will display your estimated net worth. A positive net worth indicates you own more than you owe, while a negative net worth suggests your debts exceed your assets.
Why Track Your Net Worth?
Tracking your net worth over time is a powerful way to monitor your financial journey. A growing net worth typically signifies that you are successfully managing your finances, saving, investing wisely, and reducing debt. It provides a clear, quantifiable measure of your progress towards long-term financial goals like retirement, buying a home, or achieving financial independence. Regularly updating your net worth can motivate you to make better financial decisions and stay on track.
function calculateNetWorth() {
var cashChecking = parseFloat(document.getElementById("cashChecking").value) || 0;
var cashSavings = parseFloat(document.getElementById("cashSavings").value) || 0;
var investmentAccounts = parseFloat(document.getElementById("investmentAccounts").value) || 0;
var retirementAccounts = parseFloat(document.getElementById("retirementAccounts").value) || 0;
var propertyValue = parseFloat(document.getElementById("propertyValue").value) || 0;
var vehicleValue = parseFloat(document.getElementById("vehicleValue").value) || 0;
var otherAssets = parseFloat(document.getElementById("otherAssets").value) || 0;
var creditCardDebt = parseFloat(document.getElementById("creditCardDebt").value) || 0;
var studentLoans = parseFloat(document.getElementById("studentLoans").value) || 0;
var autoLoans = parseFloat(document.getElementById("autoLoans").value) || 0;
var mortgageBalance = parseFloat(document.getElementById("mortgageBalance").value) || 0;
var personalLoans = parseFloat(document.getElementById("personalLoans").value) || 0;
var otherLiabilities = parseFloat(document.getElementById("otherLiabilities").value) || 0;
var totalAssets = cashChecking + cashSavings + investmentAccounts + retirementAccounts + propertyValue + vehicleValue + otherAssets;
var totalLiabilities = creditCardDebt + studentLoans + autoLoans + mortgageBalance + personalLoans + otherLiabilities;
var netWorth = totalAssets – totalLiabilities;
var resultDisplay = document.getElementById("netWorthResult");
if (netWorth >= 0) {
resultDisplay.style.color = "var(–primary-blue)";
} else {
resultDisplay.style.color = "red"; // Indicate negative net worth
}
resultDisplay.textContent = "$" + netWorth.toLocaleString(undefined, { minimumFractionDigits: 0, maximumFractionDigits: 0 });
}