31 Days

Day 13

Know Your
Net Worth


You might think it’s not all that important to know your net worth, if you don't have a private jet or a yacht. But the truth is, calculating this simple number is the first step on getting your finances on track. And we all want to be better at managing our money, right? We've all got financial goals we'd like to one day attain. But before you can go where you want to, you have to know where you stand.

In financial terms, your net worth is the amount by which your assets exceed your liabilities (or don't). In more simple speak, it is the difference between what you own and what you owe. If your assets exceed your liabilities, you have a positive net worth. When your liabilities are greater than your total assets, you have a negative net worth.


According to Investopedia, your personal net worth provides a snapshot of your monetary situation at this point in time. While this figure is helpful—it can, for example, confirm you're saving and spending appropriately or provide a wake-up call if you're veering off track—monitoring your net worth over time is what's important and offers a more meaningful view of your finances. It can serve as a financial report card that allows you to evaluate your financial health and can help you identify areas you might want to address in order to reach your financial goals.

Certified financial planner and Personal Capital expert Michelle Brownstein says you shouldn't be disheartened by where you are today. “Taking that first step is so important for just figuring out where you stand. I think sometimes we put it off because we're worried about what that number tells us,” she says. “But pushing it off only makes it harder to do later.”


Platforms such as Personal Capital and Mint make it easy to calculate your net worth by providing you with the option to link together all of your accounts, from personal checking and savings to money markets, CDs and retirement accounts. Or, if you prefer to do the calculations yourself, you simple add up all of your assets (bank and investment accounts, vehicles, real estate, etc.), then add up all of your outstanding debts (credit cards, student loans, car loans, mortgage, etc.). Then subtract the value of your liabilities from the total value of your assets to figure out your net worth.

Brownstein says that you can easily calculate this in just 30 minutes—or a few hours—depending on how many financial accounts you have in your name and how long it takes you to collect the info. But once it's done, updating it is easy, and it will provide you with the outlook you need in order to remain of a master of your money.


American households hold a lot of debt (over $15 trillion in 2018), which pokes a big hole in our collective net worths.