When it comes to your personal finances, one number matters more than your salary, your savings balance, or even your monthly budget: your net worth.

This single figure gives you a full-picture view of your financial health — and tracking it over time can be incredibly motivating.

In this article, we’ll break down exactly how to calculate your net worth, why it’s so important, and how it can help you take control of your money and your future.

What Is Net Worth?

Net worth = Assets – Liabilities

That’s it. It’s a simple formula, but it tells a powerful story.

Assets are everything you own that has value:

• Cash and savings
• Retirement accounts (401k, IRA, etc.)
• Investments (stocks, bonds, crypto)
• Property (home, car, etc.)
• Valuable items (jewelry, collectibles)

Liabilities are everything you owe:

• Credit card balances
• Student loans
• Auto loans
• Mortgage
• Personal loans

Subtracting what you owe from what you own gives you your net worth.

Why Your Net Worth Matters

Your net worth shows you where you really stand — beyond just how much you earn or how much is in your checking account.

1. It Helps You See the Big Picture

Maybe you’re earning a solid income, but your net worth is low or even negative. That could signal high debt or underinvestment. On the flip side, a modest income paired with a growing net worth shows healthy financial habits.

2. It Keeps You Focused on Growth

Tracking your net worth can feel like watching your personal financial score rise. Every debt you pay off or dollar you invest nudges that number higher. That’s real progress — and it’s motivating.

3. It’s Essential for Setting Goals

Want to hit a $100,000 net worth milestone? Become debt-free by age 40? Retire early? These goals start with knowing your current net worth and making a plan to improve it.

What Is a Good Net Worth?

There’s no one-size-fits-all answer, but benchmarks can help you understand whether you’re on track. A common rule of thumb comes from Fidelity, which suggests your net worth should be roughly equal to your annual income by age 30, 2x by 35, 3x by 40, and so on. For example, if you earn $75,000 per year, aiming for a net worth of $75,000 by age 30 and $150,000 by age 35 is a strong goal.

But these are just general guidelines. Your goals, lifestyle, and financial responsibilities may shift what’s realistic for you. The most important thing is that your net worth is trending upward over time and aligned with the future you’re working toward — whether that’s buying a home, retiring early, or building generational wealth.

How to Track Your Net Worth

You can calculate your net worth with a basic spreadsheet or use free tools like:

• Personal Capital
• YNAB (You Need A Budget)
• Monarch Money
• Tiller (Google Sheets-based)

Make it a monthly habit — pick a date and log your totals. You’ll be amazed at how motivating it is to see progress over time.

Watch: How to Calculate Your Net Worth (Video)

We’ve created a short YouTube video to walk you through calculating your net worth in under 10 minutes — including a simple template you can copy.

Watch now: How to build real WEALTH – it’s easy, track this 1 number!

Take the Next Step: Build a Budget

If you’re ready to get serious about improving your net worth, the next step is building a strong, realistic budget.

Our guide will show you how to create a plan that works — without feeling restricted or overwhelmed.

Read next: Budgeting Basics: How to Take Control of Your Money

Final Thoughts

Your net worth is your financial foundation — and whether it’s currently negative, small, or growing fast, knowing it is empowering.

Remember, this isn’t about comparison. It’s about tracking your own progress and building the kind of future you want, one step at a time.

So take five minutes today, crunch your numbers, and start watching your net worth grow.