Calculate Net Worth: Simple Guide to Your Financial Status

Easily calculate your net worth

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I have one number in my financial life that is crucial for understanding my financial standing: my net worth. I calculate our net worth every month as part of my financial routine, just like I close the budget of the previous month and set up the new one. You may have heard of net worth. If not, you might be asking: What the heck is my net worth and how do I calculate it?

There are many numbers that play a role in your financial life, such as your income, expenses, savings, investments and so on. But there’s only one number that brings all of these numbers together and tells you exactly where you stand financially right now – your financial status, your net worth.

What is my net worth?

Your net worth is the number that combines all the numbers of your financial life into one number. And this one number tells you about your current financial status.

In simple terms, this means subtracting all of your liabilities from your assets. The result you get is your net worth.

This can be positive or negative. If you have a positive net worth, it means you have more assets than liabilities. If you get a negative result, your liabilities are higher than your assets.

Why is it important to calculate my net worth?

Why is it so important to calculate your net worth?

The answer is simple – to know where you stand financially.

Whether you’re just starting to work on your finances or you have a specific financial goal you’re working toward, your net worth is the number that will help you keep track of your financial progress.

You can track your debt payments and your income. But these numbers alone don’t tell you anything about your financial status. Only your net worth can do this. It’s the big picture of your finances.

Instead of just focusing on one number, such as your debt, you see the bigger picture, which can give you real clarity about your financial progress.

Now that you know how important it is to know your net worth, let’s dive into what it entails and how to calculate it.

What do I need to calculate my net worth?

One of the most important requirements for calculating your net worth is that you have all of your financial records accurately organized and within reach. This way you can easily find all the numbers you need for the calculation.

If you use online banking, you should also have your smartphone with you.

How can I calculate my net worth?

Calculating the net worth, a smartphone and the free template for a net worth calculator.

I’ve crafted a free straightforward worksheet for you, which, paired with this guide, makes calculating your net worth a breeze.

01 List your assets.

List your assets, showing gold and diamonds.

Start listing your assets on the left side of your monthly net worth statement. An asset is anything you own that has value.

Your assets may include:

  • Savings
  • Balances in all accounts such as savings accounts, checking accounts
  • Depot values
  • Property
  • Pension funds
  • Jewelry
  • Car

Once you’ve written down all of your assets, add them up and enter the total on the worksheet.


  • Vehicle: If you own a vehicle, it is considered an asset. But it is called a depreciating asset because the value decreases over time. You can have the value of your vehicle determined free of charge on certain websites. This option is suitable if you would actually sell your vehicle in a private sale if you decide to do so in the future. Do you have a loan for your vehicle? If so, be sure to list the debts under liabilities.
  • Real Estate: If you list your home or apartment as an asset, you can also visit websites to estimate its value for your net worth summary. Remember to list any mortgage you owe on the home as liabilities as well.

02 List your liabilities.

List your liabilities, a list of debt.

A liability is a financial obligation or something you owe. Write down all of your liabilities on the right side of your monthly net worth statement. Make sure you write down the total amount you owe on each type of debt, not your monthly payment.

Liabilities may include:

  • Debts, e.g. credit card, overdraft
  • Mortgages
  • Outstanding invoices and payments
  • Loan for car
  • Student loans

Once you’ve written down all of your assets, add them up and calculate the total.

03 Calculate your net worth.

Calculate your net worth by weighing your liabilities and assets against each other on a scale.

Next, take all of your assets and subtract all of your liabilities.

The number you are left with is your current net worth.

Don’t be afraid if you get a negative number. If you have a negative net worth, it just means you owe more than you own. With time and continued practice of good financial habits, you can improve your net worth.

Be patient with yourself because it takes time to change your habits, reduce spending, and pay off debt. But every step you take brings you a little closer to your financial goals.

04 Compare the current month with the last month.

Compare the current month with the last month. Showing two month, November and December.

The final step is to compare your current net worth to last month.

Two simple formulas will help you check your progress from month to month.

  1. Change in Euro/ Dollar = Net assets this month โ€“ Net assets last month
  2. Percentage change = Change in Euro/ Dollar รท Last month’s net assets (Move the decimal point two places.)

These two formulas show you whether your overall financial picture has improved or worsened.

When you make good financial decisions, your net worth increases. However, bad decisions have the opposite effect.

At this point, you’ll realize why calculating your net worth is more important than just focusing on a number.

When should I calculate my net worth?

There is no rule as to when you should calculate your net worth. But if you want to track your financial progress regularly, I recommend calculating your net worth at the end of each month. This way you can accurately track your progress because you are always checking the same period of time.

Just as you complete your budget at the end of the month, you should also calculate your net worth at the end of each month. But before you do that, make sure all transactions (bills, debts, savings contributions, etc.) have been posted to your bank account.

Why is it important to track your net worth?

Your net worth is not a static number. It changes over time as you make different financial moves.

Every time you pay off debt or put money into your savings account, you increase your net worth. Keep in mind that although your net worth may remain negative for a while, when you make a debt payment, you are reducing your total debt – and increasing your net worth.

Tracking your net worth regularly can help you in two ways.

  1. It can encourage you as you get closer to your financial goals.
  2. But it can also motivate you to adjust your budget if your progress slows or you realize you’re heading in the wrong direction.

What can you learn from your net worth?

Your net worth isn’t just a number you should calculate to track. You can learn a lot more from this number.

First of all, you can see that your income alone is not relevant when it comes to knowing how wealthy you are. The same goes for your debts. They say nothing about your overall financial situation.

Knowing your net worth and seeing all of these numbers together can help you gain clarity on where you need to make adjustments to increase your net worth.

These could be:

  • Pay off your debt more aggressively
  • Invest more money in your savings
  • Earn more money, be it through a pay rise or through a part-time job
  • Refinancing of loans at more favorable conditions

Just as your budget teaches you where to spend the most money and how to save more, you can learn from your net worth what financial moves you can try next to increase it.

By the way: A financial goal can be to work towards a certain net worth.

A final note

While a budget plan and your bank statements give you an overview of your cash flow, net worth is the number that tells you where you actually stand financially. Only by starting to calculate your net worth monthly can you continually track your financial transformation over time. Net worth is the fact that you can use to determine whether you are on the way to achieving your goal. It’s your financial snapshot.

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