Do You Know Your Net Worth?

Do you know your net worth? If you don’t, you should. According to the Association for Financial Counseling and Planning Education, only 5% of people know their net worth. That number just seems crazy to me! However, I believe it. There have been many times when someone has told me that they have no idea…

Michelle Schroeder-Gardner

Written By:

Michelle Schroeder-Gardner

Last Updated: December 28, 2023

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Do you know your net worth?

Do you know your net worth? According to the Association for Financial Counseling and Planning Education, only 5% of people know their net worth. Crazy!If you don’t, you should.

According to the Association for Financial Counseling and Planning Education, only 5% of people know their net worth. That number just seems crazy to me!

However, I believe it.

There have been many times when someone has told me that they have no idea how much debt they have, how much money they have saved, what their assets are worth, and so on.

Even more shocking, some can’t even give me an estimate and have no clue whatsoever about what the amount would be. Or, when they do give me a number, their significant other chimes in about how they are extremely wrong.

This is something that definitely needs to change.

Net worth is a very important measure of your financial situation, and it is something you should be aware of.

There are many positives to being aware of your financial situation and net worth, such as:

  • Knowing your net worth will help you manage your money better. If you know what your net worth is, you may be more mindful of your spending and other financial decisions, such as with keeping a budget. After all, if you have a negative net worth or if it’s not as high as you hope, then you will probably be quite motivated to work on changing that for the better.
  • Your debt matters too. Many people only think about what their assets are and base how well they are doing on just that. However, your debt plays a big factor! If you have a lot of debt, do you really think you are doing all that well?
  • Knowing your net worth may stop financial infidelity. Yes, knowing your net worth can help you be aware of your financial situation. If you are unaware, then the possibility of financial infidelity is higher.
  • Being aware can help you with your financial goals. Like I said above, knowing your net worth is a great measure of how you are doing. If you know how you’re doing, you can be more motivated with your goals. Plus, knowing your net worth just makes sure that you are more aware of what’s going on!

Overall, it’s good to know your net worth because you’ll be able to see a full picture of your financial situation, which will help you work towards realistic financial goals.

See, you might think that you are doing well financially, but there is a chance that you haven’t looked at the complete picture. I know people who think they are doing great, then they figure out their net worth only to realize that it is negative because they didn’t account for their debt.

Think about it: You might have $100,000 in assets, but if you have as much in debt, are you really doing that well?

This is where knowing your net worth is especially important. It is a great measurement of how you are doing financially.

 

What’s the average net worth?

Below is a very (VERY!) simple comparison of net worth by age range. While this isn’t perfect, it can tell you how you compare to others in the United States.

 

Now, these numbers aren’t the greatest, but they can be a good start.

If you want to be even better than the average, though, I highly recommend reading The Average Net Worth For The Above Average Person on the Financial Samurai website. This is an excellent article that can help get you motivated to improve your finances.

According to Financial Samurai, the average net worth of the above average person is

  • $79,000 for a 25 year old
  • $250,000 for a 30 year old
  • $660,250 for a 40 year old
  • $2,871,500 for a 65 year old

I’d love to hear what all of you have to say about the “above average person” in the comments below.

 

How to calculate your net worth

You can calculate your net worth by totaling all of the things you own (your assets), such as:

  • The market value of your home. Determining the value of your home can be done by using Zillow, comparing it to similar homes, and so on.
  • The value of your car. You can use Kelley Blue Book to determine this.
  • The amount in investments, such as retirement accounts
  • Checking and savings accounts, cash, certificates of deposit, etc.

Then, subtracting all of your debt (your liabilities), such as:

  • Mortgage
  • Car loan
  • Credit card debt
  • Student loan debt
  • Medical debt
  • Other debt

And then you have your net worth.

Here’s a quick equation:

Total Assets minus Total Liabilities = Your Net Worth

So, if you have $100,000 in assets and $100,000 in liabilities, that means your net worth is $0.

If you have $10,000 in assets and $50,000 in liabilities, that means that your net worth is -$40,000. Yes, you can definitely have a negative net worth.

 

How often should you calculate your net worth?

I believe looking at your net worth once per month is a good idea. You can look at your budget and net worth at the same time, which will help you see what you need to improve on and change.

That being said, there will be fluctuations from month to month, as the stock market goes up and down, home values change, and so on. However, it is still a great measure of personal wealth and I highly recommend keeping track of it.

It’s quite easy to look into this once a month, especially if you use Personal Capital (more details on this below).

 

How to improve your net worth.

If your net worth is negative or if you want to improve it, there are two things you can do and those are increase your assets and decrease the amount of debt you have.

To do this, there are many things you could do such as:

And so on!

 

Personal Capital

You need this simple tool for your net worth.

I recommend you check out Personal Capital for a better measurement of your financial situation and net worth.

Personal Capital is similar to Mint, but much better. Personal Capital allows you to aggregate your financial accounts to easily see your financial situation. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more. And, it’s FREE.

With Personal Capital, you can link all of your accounts for a complete picture of your net worth and financial situation.

I absolutely love Personal Capital and highly recommend it.

Do you know your net worth? Why or why not?

 

Filed under:

Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. The Green Swan

    It is hard to hear when people don’t know their basic finance values. Of course I keep a close eye on ours, but at the same time try not to monitor too closely. To your point it can fluctuate month to month so I keep downturns in mind or remember where I move money so I know why one account/fund is lower or higher. I especially don’t like hearing when people don’t know how much debt they have. That should be the first thing on the top of someones mind so they can put together a plan to pay it off and then start saving. Good eye opening read.

    Reply
    1. Michelle Schroeder-Gardner

      I agree! A person should definitely know how much debt they have.

      Reply
  2. Dividends Down Under

    Hey Michelle, we totally agree – knowing your net worth is very important as it shows you how you’re tracking, what’s working and what isn’t. At the moment we don’t openly disclose our net worth (yet) but we do track it ourselves. At a young age, it’s an encouraging start and we aren’t quite at Financial Samurai’s numbers we’re working hard to get there.

    Tristan

    Reply
    1. Michelle Schroeder-Gardner

      Awesome!

      Reply
  3. Penny @ She Picks Up Pennies

    I actually don’t track our net worth religiously. I monitor all of our accounts, tracking that carefully. But I don’t necessarily add them all up every month. I know that sounds a bit outrageous, but I get way too sucked into market fluctuations if I’m doing that. Regardless, I do think it’s vital to know where you stand, especially when it comes to debt (loans, CCs, and mortgage).Maybe I will look into Personal Capital. I’m not sure 🙂

    Reply
    1. Michelle Schroeder-Gardner

      Personal Capital is great. Highly recommend 🙂

      Reply
  4. Lisa

    On YNAB4 (You Need A Budget), my favorite report is the net worth one. It doesn’t factor in assets like cars or homes, but you can set it to evaluate your net worth based on any of your monetary accounts, including retirement savings and debt. I remember the day when we doubled our net worth (the day we had twice as much in savings as student loan debt) and what an amazing feeling it was. We’re looking forward to paying off my husband’s loans once his deferment ends next year and working towards our new goal of financial independence!

    Reply
    1. Michelle Schroeder-Gardner

      Good luck with your financials goals! Sounds you like are doing well.

      Reply
  5. Ms. Montana

    I’m just putting the finishing touches on my very first net worth update. We only really look at ours once or twice a year. It’s really the culmination of every good money choice made. Every lower grocery bill, affordable trips, driving an older car, investing this year (and 10 years ago), ect. I was a bit surprised that even after taking a year long sabbatical our net worth went up! Can’t complain about that.

    Reply
    1. Michelle Schroeder-Gardner

      That’s great that your net worth went up after a year long sabbatical!

      Reply
  6. Misha @ Money She Wrote

    Great post! I will definitely share this with my friends who don’t really know where to start with their personal finances. I have been tracking my net worth with LearnVest ever since you recommended it back in 2012 🙂 I recently switched over to Personal Capital once I saw your recommendation and really like their platform. I appreciate that you listed where the above average person should be at different ages. It is nice to have something to compare to no matter what stage in life we’re in.

    Reply
    1. Michelle Schroeder-Gardner

      Yes, Personal Capital is great!

      Reply
  7. Andrew @ Quest for Billions

    I started tracking my net worth in January of this year using Excel. It is great to finally have a baseline metric to compare future numbers against. I agree with your suggestion about checking your net worth on a monthly basis. When I first started tracking my net worth, I checked the value of my investments way too often. I had an app on my phone, where I could easily get an update of my portfolio. I found myself opening this app multiple times per day. Financially, the harm is not checking your portfolio, but buying and selling. However, there is an emotional harm from these constant real time updates. The markets are volatile and seeing that you have lost money sucks.

    Reply
    1. Michelle Schroeder-Gardner

      Definitely!

      Reply
  8. Dani

    I have to tell you, I put off trying Personal Capital for probably a year after I’d first heard about it–I didn’t want yet another website with “access” to all of my accounts. I was “tracking” in YNAB4, and even put in our retirement accounts as off-budget, but updating them periodically was annoying and inconsistent at best. I signed up for PC about 2 months ago… AND I LOVE IT! I am able to see market fluctuations, and it’s been quite interesting to watch our home value peak in the summer months and then dip down a bit as summer drew to a close; I can see how well my portfolio is performing, and what was REALLY helpful to me was to see the fees that are being charged by the various accounts. Talk about an eye-opener! We’re in the process of moving funds from one that charges an annual “maintenance” fee (they don’t do a dang thing to earn this) in addition to the fund fees and we’ll drop it into one of the lowest-fee and best-performing accounts that we have. It seems like the “topic du jour” for many of the PF blogs I follow surrounded the fees and how much they eat away at the final value of retirement accounts after 10, 20, 30 years, so it was serendipitous timing, and what an amazingly handy tool to see what fees we were paying! And they have many more useful tools as well, to show if we’re on-target or not saving enough, etc, given our current balances and savings rate. LOVE IT, LOVE IT, LOVE IT!!!
    So, while we’re not quite to Financial Samurai’s above average (and we will not be by the time we’re 65 either, I don’t think), we’re aware, and we’re working on it. No spring chickens here, and Life has dealt our NW some pretty hard blows in the past, but we pick back up and march on!

    Reply
    1. Michelle Schroeder-Gardner

      Thank you for your positive review of Personal Capital. It’s a really great service!

      Reply
  9. Kelsey @ Tealmama

    I can answer yes. 🙂 But we’ve only been formally tracking and calculating it for a few months now. However, we could have given an approximate value before. I can say that tracking our net worth is very motivating to work hard on increasing the value. The average numbers are very interesting. Thanks for sharing.

    Reply
    1. Michelle Schroeder-Gardner

      Awesome! Great job!

      Reply
  10. Graham @ Reverse The Crush

    Great reminder post Michelle,

    I think keeping track of your net worth is a great reminder and way to make smarter decisions. I like to keep track of it every time I get paid, because some goes to savings and some goes to debt. It’s great to see progress with each pay.

    Although I do have to admit that my priorities have shifted since resigning from the day job,however, I still continue to keep an eye on my net worth on a monthly basis. Thanks for sharing.

    Reply
    1. Michelle Schroeder-Gardner

      Welcome 🙂

      Reply
  11. Lindsey

    I don’t know my net worth, and frankly have never thought of it. Since the only thing I currently own is my car (with the exception of my possessions), it just was something that never crossed my mind. Knowing your net worth is super important, and I had no idea just how much debt affected that.

    This is great information!

    Reply
    1. Michelle Schroeder-Gardner

      Thank you!

      Reply
  12. Vicki@Make Smarter Decisions

    My brother got us started tracking our net worth about 6 years ago. It was awesome how quickly it increased each year. Our rental properties generated income and with the mortgages being paid down by tenants, our net worth really grew! One problem we have is including our pensions in our net worth… I still can’t find a good way to include it (or reasons not too!)

    Reply
    1. Michelle Schroeder-Gardner

      What a great brother! 🙂

      Reply
  13. Eden @ Mint Notion

    I currently use Mint, but I have heard good things about Personal Capital. In regards to the “above average person”, $79K does seem quite high for a 25 year old, unless they got hired immediately after finishing their Undergraduate studies (without pursuing graduate school full-time) or started a good investment portfolio at an early age. Nonetheless, those are interesting statistics!

    Reply
    1. Michelle Schroeder-Gardner

      I agree!

      Reply
  14. Melissa

    I don’t think much about our net worth. We have been so focused on paying down our mortgage, I don’t think about it much! This is a great reminder. I appreciate the graphic on “net worth by age”. Often times, I don’t know how much our net worth should be. It can be so confusing! I want to be better about setting goals for this too! Thanks for the motivation!

    Reply
    1. Michelle Schroeder-Gardner

      Welcome!

      Reply
  15. Amanda

    Yes, we’ve tracked our net worth ever since I first read Your Money or Your Life, about 8 years ago. It’s a great way to get an overall picture of your financial situation, something your monthly budget won’t tell you. We track it each month, but watching it grow from year to year is the best way to get a good picture of whether or not you are headed in the right direction.

    The above average net worth numbers from Financial Samuria are would definitely represent people that are working toward an earlier retirement or FI, as they are a far cry from the real average. I’m just grateful we fit into the above average category 🙂

    Reply
  16. Michelle Schroeder-Gardner

    You’ll be fine 🙂

    Reply
  17. Amanda-LivingFullyandFree

    Oh geez, I’m pretty sure my networth is in the negative with all the debt I have. I definitely need to make this a priority though. Thanks for the information!

    Amanda

    Reply
  18. Finance Solver

    Net worth, such an important number that not a lot of people know about! I agree with Financial Samurai’s net worth guide. I’m on track to hit 79,000 by the time I hit 25 and always looking for side income opportunities so that I hit that even earlier. Just have to make sure that I don’t take an obscene amount of risk and hopefully I can get there!

    Reply
  19. Michael

    Nice information from Financial Samurai on the above average person. Thankfully, it looks like I am doing better than the above average person.

    From my perspective, it is good enough to check your net worth once a year.

    Reply
  20. Rajkumar Jonnala

    Comment: Knowing my net worth was actually a big hurdle for me to manage my money in a better way. It is true that If we know what out net worth is, we may be more mindful of our all spending and other economical and financial decisions. This post actually helped me find my real net worth and I calculated the net worth using the tips which you have provided and I have over come the negative net worth which bothered me a lot up to certain extent.

    We expect much more good posts like this to make everyone self-sufficient and financially secure. Keep rocking and have a good day.

    Reply
  21. JT

    Yep. I check it once a month, at the end of each month, so I have a pretty recent snapshot. I like your advice of once a month — more than that and it will drive you crazy seeing the fluctuations. Less than that and you’ll start missing chances to optimize as well as miss key data points in your trend analysis.

    I do a weird thing. I always know it but always forget it. I FIRED (is that the right short hand for Financially Retired?) some years ago, but I somehow convince myself that it’s not a real number or that it can drop in half at any time. I do this so I don’t get financially flabby and careless.

    Reply
  22. Aparna @ Elementum Money

    Compelling article on the reasons to track one’s net worth monthly. Being a newbie personal finance blogger, I am yet to start myself but this as good a push as ever. While I am still not convinced about publishing it (In India, money is still not out there in the open) but tracking is definitely a must.

    Reply
  23. Angie

    Good article on net worth. I was wondering what everyone’s take is in calculating net worth when it comes to investment real estate?

    For example, if you have $50K equity and a $150K outstanding loan, would you say that’s a +$50K to your net worth, or would you say that’s a -$100K (equity minus mortgage) to your net worth? OR, because the house really hasn’t been sold yet, your $50K equity doesn’t really count and the only thing that really affects you is your $150K mortage, and so it’d just be counted as -150K to your net worth until you liquidate it?

    When I used to own investment property, I’d just pretend it’s worth 0 and say that it’s a wash due to the complications above and would exclude it in my Mint. But was wondering what everyone else did for the properties?

    Reply