Know Your Net Worth in 3 Steps
Your net worth is the amount of money you’d walk away with if you sold everything you owned and paid off all your debts. It’s basically your financial report card and is an interesting metric to monitor as you gain proficiency in budgeting and meeting big financial goals. Here’s how to figure out your net worth:
1. List Your Total Assets
These are things you own that have value. Think:
Your bank accounts
Retirement accounts
Cars
House
Any valuable items you could sell
Write down how much each would sell for today, not what you paid for them. Add it all up.
2. List Your Total Debts
Write out every debt you owe:
Credit cards
Student loans
Car loans
Mortgage
Anything else you’re making payments on (medical debt, HELOCs, etc.)
Use the payoff amount for each one, not the balance showing online. You may need to call your lenders to get the exact number. Add it all up.
3. Do the math
Take your Total Assets and subtract your Total Debts. That’s your net worth.
Here are some pro tips for assets with debt:
Car loans:
Look up your car’s private sale value on Kelley Blue Book. Add that to your assets.
Call your lender to get the current payoff amount. Add that to your debts.
Mortgage:
Check Redfin or Zillow to see what your home might sell for today. Use that as your asset value.
Call your mortgage company for your payoff amount, not the balance you see online. Use that as your debt.
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