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 statistic is surprising, but sadly believable.
Many people really don’t understand their overall financial position.
I’ve often met people who can’t tell me how much debt they have, how much they’ve saved, or what their assets are worth. Even when they try to estimate, their figures are often far off — sometimes corrected by a partner who knows the real numbers.
This needs to change.
Your net worth is a fundamental measure of your financial health, and tracking it should be part of everyone’s financial routine.
Being aware of your net worth offers several important benefits:
- Better money management. Knowing your net worth makes you more mindful of spending and financial choices. If your net worth is negative or lower than you’d like, you’re likely to take steps—like budgeting—to improve it.
- Debt matters. Many people focus only on assets and forget liabilities. High debt can outweigh asset growth and lead to a misleading picture of financial health.
- Reduced financial secrecy. When household members are aware of the true financial picture, the risk of financial infidelity decreases.
- Clearer financial goals. Knowing your current net worth helps you set realistic goals and stay motivated as you track progress.
In short, knowing your net worth gives you a complete view of your finances and empowers you to make better decisions.
You might feel you’re doing well based on assets alone, but once debts are considered, the true picture can be very different. I’ve known people who assumed they were financially secure until they calculated their net worth and discovered it was negative.
Consider this: Owning $100,000 in assets is less impressive if you also have $100,000 in debt — your net worth would be zero.
Net worth is one of the clearest metrics for understanding your financial standing.
What’s the average net worth?
Below is a simple comparison of average net worth by age range in the United States. While not perfect, it gives a useful point of comparison.
(Infographic removed for clarity.)
These figures are only a starting point. If you want to aim higher, Financial Samurai’s analysis of the “above average” net worth provides motivating benchmarks.
According to that analysis, an “above average” net worth might look like:
- $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
These benchmarks can be useful to measure progress and set goals. Consider where you want to be and what steps will get you there.
How to calculate your net worth
To calculate your net worth, add up everything you own (assets) and subtract everything you owe (liabilities).
Common assets include:
- The market value of your home (estimated using recent sales, Zillow, or comparable properties)
- The value of your car (Kelley Blue Book or similar)
- Investment and retirement accounts
- Checking and savings balances, cash, CDs, and other liquid assets
Common liabilities include:
- Mortgage balances
- Auto loans
- Credit card debt
- Student loans
- Medical and other unsecured debt
The simple formula is:
Total Assets minus Total Liabilities = Your Net Worth
Example: $100,000 in assets minus $100,000 in liabilities equals a net worth of $0. If you have $10,000 in assets and $50,000 in liabilities, your net worth is -$40,000. Negative net worth is possible and common, especially early in a career or after large purchases financed by debt.
How often should you calculate your net worth?
Checking your net worth monthly is a practical habit. Reviewing it alongside your budget helps you spot trends, make adjustments, and stay motivated.
Expect monthly fluctuations from market movements and changing property values, but tracking over time reveals meaningful progress.
Tools that aggregate accounts can make monthly tracking quick and accurate.
How to improve your net worth
To increase your net worth, focus on two strategies: grow your assets and reduce your liabilities.
Practical steps include:
- Find ways to increase income through side gigs, career advancement, or passive income streams
- Pay down debt, prioritizing high-interest balances
- Cut unnecessary spending and redirect savings into investments or debt repayment
- Build emergency savings to avoid future debt
Small, consistent changes can compound into significant improvements in net worth over time.
Use a simple tool to track net worth
Financial aggregation tools let you link bank accounts, mortgages, credit cards, and investment accounts to view a consolidated net worth snapshot. Many of these tools offer free tiers that make tracking effortless.
I recommend using an account-aggregating service to get a complete, up-to-date picture of your finances. It simplifies monthly tracking and helps you spot areas for improvement.
Do you know your net worth? If so, how often do you check it and what have you learned from tracking it?