How to calculate your net worth, with a worked example

Your net worth is everything you own minus everything you owe, as of today. Add up the current value of your assets, add up the current balance of your debts, and subtract. The number itself matters less than its direction: checked monthly, it tells you whether your finances are getting stronger, which income alone cannot.

What counts as an asset

An asset is anything you own that has a cash value today. Use what it is worth now, not what you paid.

• Cash and checking balances.
• Savings, including money market accounts and CDs.
• Investment accounts: brokerage accounts, and retirement accounts such as a 401(k), IRA, Roth IRA, or HSA, at their current balance, even though you can't spend them today.
• Education savings such as a 529 plan.
• Your home, at a realistic current market estimate.
• Vehicles, at what you could sell them for today, not the purchase price.
• Crypto at its current value.
• Money owed to you that you genuinely expect to collect.

Leave out income, a bonus you expect, and possessions you couldn't sell for meaningful money. Furniture and electronics are not assets in this picture.

What counts as a liability

A liability is anything you owe. Use the current payoff balance.

• Credit card balances, including charges since the last statement.
• Student loans, at the balance on the servicer's site.
• Auto loans and personal loans.
• Your mortgage, at the remaining principal.
• Medical debt and buy-now-pay-later balances.
• Money you owe to family or friends.

Leave out this month's bills and rent. They are expenses, not debts, unless they are overdue.

The calculation, step by step

1. Write today's balance or value next to each asset.
2. Write today's balance next to each liability.
3. Total each column.
4. Subtract liabilities from assets.

Net worth here is $69,400 minus $34,300, or $35,100.

A home appears on both sides. Add a house worth $350,000 with $281,000 left on the mortgage, and the totals become $419,400 in assets and $315,300 in liabilities, for a net worth of $104,100. The $69,000 difference between the house and the mortgage is the home equity, and that is all the house contributes.

Reading the number

A negative net worth is normal early on. A new graduate with $2,000 in checking and $20,000 in student loans has a net worth of about negative $18,000, and that is a starting point, not a verdict. What matters is that the figure rises over the following years.

Movements between the two sides don't change it. Paying $500 toward a credit card from checking lowers assets by $500 and liabilities by $500, and net worth stays the same. What raises net worth is income you keep and growth in what you own. What lowers it is spending and interest. Paying down debt still matters, because it stops interest from pulling the number down, but the payment itself is not the gain.

Markets move the number without you. A 5% swing on $45,000 of investments is $2,250 in a month. Judge the trend over a year, not the change since last week.

Common mistakes

• Using the purchase price for a car or a home instead of today's value.
• Forgetting a loan, most often a student loan that isn't in your banking app because it sits with a separate servicer.
• Counting income or money you expect. Net worth is a snapshot, not a forecast.
• Skipping retirement accounts because you can't touch them. They are yours and they count.
• Checking daily. Monthly is often enough to see the direction, and daily changes are mostly market noise.

Common questions

Should I include my house? Yes, at a realistic current value, with the remaining mortgage as a liability. If you would rather not guess at the value, use what you paid and update it every year or two. The mortgage balance is exact, so the equity figure is only as good as the value you use.

Is my car an asset? Yes, at what you could sell it for today, and it falls every year. A car with a loan bigger than its resale value contributes a negative amount, which is worth knowing.

Do I count my partner's accounts? It depends on the question. A household net worth counts everything either of you owns or owes and is the figure that matters for shared goals. A personal figure counts only yours. Couples who keep separate accounts often track both.

How often should I calculate it? Monthly, on the same day, so the readings are comparable. Quarterly is enough if the monthly routine won't stick. The useful comparison is your own figure twelve months ago, not anyone else's.

How Zypper handles this

Zypper computes net worth from every account and charts it over time. Connected accounts update every day, and the supported types cover both sides of the calculation: checking, savings, money market, and CDs; credit cards; investment and brokerage accounts including 401(k), IRA and Roth IRA, HSA, 529 plans, and crypto exchange accounts; and loans including mortgages, auto, student, and personal loans. Anything you can't connect, such as a home, a vehicle, cash, or a private loan, is added as a manual account with the balance you set, so the number stays complete. An account you leave out of your budget still counts toward net worth. If the figure looks off, the usual causes are an account not yet added, a manual balance that needs updating, or a connection that expired and stopped syncing. See Net worth tracking, Manual accounts, and Supported account types, or get started with Zypper to see your own number.