How to Calculate Your Net Worth
Net worth is the single most important number in personal finance. Here is exactly how to calculate it — and how to track it automatically.
What Is Net Worth?
Net worth is the difference between everything you own (assets) and everything you owe (liabilities). It is the financial equivalent of a balance sheet — a snapshot of where you stand right now.
Net Worth = Total Assets − Total Liabilities
Why Net Worth Matters More Than Income
Income tells you how much flows in. Net worth tells you how much you have actually kept. Two people with the same salary can have wildly different net worths depending on their spending habits, debt levels, and investment decisions. Net worth is the scoreboard that actually matters.
Step 1: Add Up Your Assets
Assets are everything you own that has financial value. Be thorough — most people underestimate their assets by forgetting certain categories.
Use current market value, not purchase price or sentimental value. Your pension pot counts — check your most recent statement.
Step 2: Add Up Your Liabilities
Liabilities are everything you owe. Include the outstanding balance, not the original loan amount.
Step 3: Subtract to Get Your Number
Once you have both totals, the calculation is straightforward: subtract total liabilities from total assets. The result is your net worth. It can be positive or negative — negative is common early in life when mortgage and student loan balances dominate.
Example Calculation
Assets
Current account: €4,200
Savings account: €18,000
Investment portfolio (DEGIRO): €31,500
Property value: €280,000
Total assets: €333,700
Liabilities
Mortgage outstanding: €198,000
Car loan: €7,400
Credit card balance: €1,200
Total liabilities: €206,600
Net worth: €127,100
Step 4: Track It Over Time
A one-time calculation is useful. Monthly tracking is transformative. Watching your net worth grow month by month makes the impact of your saving and investment decisions visible. It also reveals problems early — months where net worth shrinks despite stable income are a signal worth investigating.
Calculate It Automatically with WonderMoney
Doing this manually every month requires pulling data from every bank, broker, and loan account. WonderMoney connects directly to your bank accounts via Open Banking and imports your investment portfolio, then calculates and updates your net worth every day automatically — no spreadsheet required.
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Frequently Asked Questions
Should I include my pension in net worth?
Yes. Your pension pot is an asset. Include the current value from your most recent pension statement. It is illiquid, but it is real wealth.
Should I include my home in net worth?
Include your home at current market value (not purchase price), then subtract the outstanding mortgage as a liability. The difference — your equity — is part of your net worth.
How often should I calculate my net worth?
Monthly is ideal. It is frequent enough to spot trends and react to changes, but not so frequent that short-term market fluctuations cause unnecessary anxiety.
What is a good net worth by age?
There is no universal answer — it depends on income, country, family situation, and goals. A useful benchmark: aim for net worth equal to 1x your annual income by age 30, 3x by 40, and 6x by 50.
Track Your Net Worth Automatically
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