Glossary term
Net Worth
Net worth is the value of everything you own minus everything you owe. Assets include cash, savings, investments, retirement accounts, home and vehicles; liabilities include mortgages, car loans, student loans and card balances. It is a snapshot of your overall financial position, and tracking it over time shows whether you are moving forward.
Updated October 17, 2026 · Editorial Team
How Net Worth works in practice
List each asset at its current market value, not what you paid. Then list every debt at its current balance. Subtract the second total from the first. A negative number is common early in adulthood or right after a large loan, and is a starting point rather than a verdict.
Say you have $12,000 in savings, a car worth $18,000 and $4,000 in other assets, for $34,000 total. You owe $15,000 on the car, $3,000 on a card and $9,000 in student loans, for $27,000. Your net worth is $34,000 − $27,000 = $7,000.
Net worth captures progress that income alone misses: paying down debt raises it just as saving does. Updating it once or twice a year with the same method is usually enough to see the trend. Remember that cars typically lose value, so their share of assets shrinks over time.
Net Worth: quick questions
Should I include my car in net worth?
Yes, at its current market value, and include the loan as a liability. Cars usually lose value, so update the figure each time.
Is a negative net worth bad?
It is common, especially with student loans or a new car loan. The trend over time matters more than one reading.
How often should I calculate net worth?
Once or twice a year is plenty for most people. Use the same method each time so changes are meaningful.
Sources
- Survey of Household Economics and Decisionmaking (SHED) — Federal Reserve Board. Accessed October 17, 2026.
- Consumer Resource Center — Federal Deposit Insurance Corporation. Accessed October 17, 2026.
We cite primary sources: regulators, central-bank data and federal agencies. Worked examples on this page are our own calculations. See our methodology.
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