Your net worth is the simplest summary of your financial life: everything you own, minus everything you owe. It is one number, but it tells you whether years of saving, borrowing, and spending have moved you forward or backward.
Unlike your salary, which only shows what comes in each month, net worth shows what you have actually kept. This guide shows the formula, what to count on each side, a fully worked example with hand-checked numbers, and the age benchmarks people compare themselves against.
Net Worth = Total Assets minus Total Liabilities
Assets are everything you own that has monetary value. Liabilities are everything you owe. If assets are larger, your net worth is positive. If liabilities are larger, it is negative. Either result is useful, because the trend over time matters more than any single snapshot.
Use current values, not what you originally paid. A house bought for $250,000 that could sell for $320,000 today counts as $320,000, and a car counts at its resale value, not its sticker price.
Use the full amount still owed, not the monthly payment. A mortgage with a $260,000 balance counts as $260,000, even though the monthly payment is far smaller.
Take a household with the following balance sheet. Every total below was added by hand, so you can check it yourself.
| Assets | Amount |
|---|---|
| Checking account | $12,000 |
| Savings account | $18,000 |
| Brokerage investments | $25,000 |
| Retirement accounts | $60,000 |
| Home, current market value | $320,000 |
| Car, resale value | $14,000 |
| Total assets | $449,000 |
| Liabilities | Amount |
|---|---|
| Mortgage balance | $260,000 |
| Student loan | $18,000 |
| Auto loan | $7,000 |
| Credit card balances | $4,500 |
| Total liabilities | $289,500 |
Net worth = $449,000 minus $289,500 = $159,500.
Notice the home counts twice, correctly: the full $320,000 value sits on the asset side, and the full $260,000 mortgage sits on the liability side. The $60,000 difference is the home equity, but counting only the equity and forgetting the mortgage would understate both sides and hide the real debt load.
Net worth usually rises with age as debts fall and savings compound, then levels off or falls in retirement as people draw on savings. The table below uses median figures from the Federal Reserve Survey of Consumer Finances, 2022 wave, the most widely cited published breakdown. The median is the middle household, half above and half below, and it is a far better benchmark than the average, which a small number of very wealthy households pulls upward.
| Age band | Median net worth |
|---|---|
| Under 35 | $39,000 |
| 35 to 44 | $135,600 |
| 45 to 54 | $247,200 |
| 55 to 64 | $364,500 |
| 65 to 74 | $409,900 |
| 75 and over | $335,600 |
These are US household figures, and wealth levels differ by country, income, and cost of living. Use them as context, not as a target you must hit. A household below its age median is not failing, and a household above it is not finished.
A negative net worth is common early in working life, especially with student loans, and it is a starting point, not a verdict. Example: $3,000 in checking plus $9,000 in a retirement account gives $12,000 in assets, against $22,000 in student loans plus $3,000 on credit cards, or $25,000 in liabilities. Net worth is $12,000 minus $25,000, which is negative $13,000. Paying down the credit card first, then the student loan, moves that number toward zero and then positive, and tracking it monthly makes that progress visible even when it feels slow.
Everything you own minus everything you owe, at current values. Positive means you own more than you owe. Negative means you owe more than you own.
Yes, for the full picture: include its full current market value as an asset and the full mortgage balance as a liability. If you want a more flexible view, also track net worth excluding home value.
No. Future earnings are not an asset you own today. Only money and property you already hold count, plus debts you already owe.
There is no single good number. Compare yourself to the median for your age band in the table above for context, then focus on whether your own number is rising over time. Income, location, and family size all change what is realistic.
Monthly is ideal for most people, quarterly is enough if your accounts change slowly. Daily checks add noise, because markets move and pending transactions distort the picture.
Market falls, a car losing value, a new loan, or a large planned expense can all outweigh a month of saving. Look at the trend over several months, and separate behavior, like saving and debt payoff, from market noise.
Run your real numbers through our free calculators:
This article is for general information only and is not professional financial advice. Asset values and lending rules change over time, so confirm figures that affect a major decision before acting on them.