Skip to Content
Older couple dancing at party symbolizing that they are enjoying retirement.
Retirement Planning

How to calculate net worth

Knowing your net worth is an important aspect of creating a personal budget. Although it is not difficult, it requires a few steps so it's key to gather certain information.

Knowing your net worth can be a valuable tool in creating a personal budget and evaluating your financial progress. By calculating your net worth, you can make financially smart moves to improve your overall financial situation.

But what exactly goes into calculating your net worth?

The process of calculating your net worth as part of your personal budget involves several different steps. While it's not a difficult process, it's important that you gather certain information relating to your assets such as life insurance or investments and then liabilities before you get started.

Investopedia suggests including the following when calculating your assets:

Cash and cash equivalents

  • Certificates of deposit
  • Checking and savings accounts
  • Money market accounts
  • Physical cash
  • Treasury bills


  • Annuities
  • Bonds
  • Life insurance cash value
  • Mutual funds
  • Pensions
  • Retirement plans - IRA, 401(k), 403(b), etc.
  • Stocks
  • Other investments

Real and personal property

  • Boats
  • Collectibles - antiques, art, coins, etc.
  • Household furnishings
  • Jewelry
  • Primary residence
  • Rental properties
  • Vacation or second home
  • Vehicles

Add together cash/cash equivalents, investments, and real/personal property. The sum represents your total assets.

For liabilities, Investopedia suggests:

Secured liabilities

  • Automobile loan(s)
  • Home equity loan
  • Margin loans
  • Mortgage
  • Rental real estate mortgage
  • Second mortgage
  • Vacation/second home mortgage

Unsecured Liabilities

  • Credit card debt
  • Medical bills
  • Personal loans
  • Student loans
  • Taxes due
  • Other debt and outstanding bills

By subtracting your liabilities from your assets, the difference will be your total net worth.

What it all means

Finding that your net worth is in the negative doesn't mean that you're financially doomed. It just means that you owe more than you own. Use your calculations to evaluate where you might be able to turn things around. For example, look at your personal budget and create a strategy for paying down more of your debt. Or, review your investment and retirement accounts to see if you need to readjust your portfolio for improved returns.

Simply put, knowing your net worth means that you'll have a snapshot that will allow you to evaluate your existing financial health, and help you proactively determine what you need to do to get back on track or to reach your financial goals.

If you're ready to see how fiscally fit your net worth is, try using one of the many online net worth calculators, or create your own net worth worksheet/spreadsheet with Microsoft Word or Microsoft Excel.


Note: Sources used in the creation of this article include Investopedia.


WEB. 1653.06.15

Arrows linking indicating relationship

Related Articles

 Grandfather playing with his young grandson.

Your life insurance portfolio: Using cash-value life insurance as part of a tax-smart retirement plan

Learn more
African-American family sitting around a dining table having dinner together

3 cost saving options for reducing housing expenses

Learn more
Middle-aged man looking thoughtful and serious while researching something on the computer.

5 Risks facing your retirement today

Learn more

All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.