How to Calculate Net Worth Step by Step
Net worth is the single number that captures your entire financial position. Add up everything you own, subtract everything you owe, and the result is your net worth. Positive means you own more than you owe. Negative means the opposite—and that's more common than you think for people under 35 carrying student loans.
Step 1: List every asset. Include checking and savings accounts, investment portfolios (brokerage, 401k, IRA, HSA), real estate at current market value, vehicles at resale value (not what you paid), and anything else worth over $1,000—jewelry, collectibles, crypto.
Step 2: List every liability. Include your mortgage balance, auto loans, student loans, credit card balances, personal loans, medical debt, and any money you owe to family or friends.
Step 3: Subtract. Total assets minus total liabilities equals net worth. Update this number every quarter to track your trajectory. A rising net worth—even slowly—means you're building wealth.
Net Worth by Age: Federal Reserve Benchmarks
The Federal Reserve's Survey of Consumer Finances (2022) provides median and average net worth by age bracket. Median is a better benchmark because the average gets skewed by ultra-high-net-worth households.
| Age Group | Median Net Worth | Average Net Worth |
|---|---|---|
| Under 35 | $39,000 | $183,500 |
| 35–44 | $135,600 | $549,600 |
| 45–54 | $247,200 | $975,800 |
| 55–64 | $364,500 | $1,566,900 |
| 65–74 | $410,000 | $1,794,600 |
| 75+ | $335,600 | $1,624,100 |
If you're under 35 with a negative net worth from student loans, you're not behind—you're normal. The median jumps dramatically between 35 and 44 as people pay down debt and build home equity. Focus on the trajectory, not where you are today.
Total Net Worth vs Liquid Net Worth
Your total net worth includes everything—home equity, retirement accounts, cars. But you can't spend home equity on groceries. Liquid net worth strips out illiquid assets (real estate, retirement accounts with early withdrawal penalties, vehicles) and shows what you could actually access within 30 days.
A household with $800,000 total net worth might only have $120,000 in liquid net worth if $500,000 is home equity and $180,000 is in a 401k. Both numbers matter. Total net worth measures wealth. Liquid net worth measures financial flexibility.
Common Net Worth Mistakes
Forgetting retirement accounts. Your 401k, IRA, and HSA balances are assets. People routinely undercount their net worth by $50,000+ because they don't log in to check these balances. Include them.
Using purchase price instead of current value. Your car isn't worth what you paid for it. Your house might be worth more or less than your purchase price. Use Kelley Blue Book for vehicles and Zillow/Redfin estimates for real estate. Overstating asset values gives you a false sense of security.
Ignoring small debts. That $3,000 personal loan from your parents and the $1,500 on a store credit card add up. Every liability counts, no matter how small. Missing debts inflates your net worth and hides the real picture.
Counting personal property too aggressively. Your furniture, electronics, and clothing have almost zero resale value. Unless something is genuinely worth over $1,000 secondhand (jewelry, art, collectibles), leave it out.
Carrying high-interest debt that's dragging your net worth down? Use the debt snowball calculator to build a payoff plan that eliminates balances fastest. Planning for the long term? The retirement calculator projects how your net worth grows over decades with compound interest. If you need a savings target for a specific goal, the savings goal calculator shows the monthly contribution needed to hit your number.