Net worth is one subtraction: everything you own minus everything you owe. The number itself is less useful than two things around it: how much of it you could actually reach in an emergency, and which way it is moving.
1. List assets at today's value
Cash, savings, retirement accounts, investments, your home at a realistic sale price, vehicles at resale value (not what you paid). Leave out furniture and electronics; they rarely sell for much.
2. List every debt at its current balance
Mortgage, car loan, student loans, credit cards, buy-now-pay-later, money owed to family.
3. Look at debt-to-asset ratio
Debts divided by assets. Under 30% is strong, 30-60% is moderate, above 60% is high, and above 100% means you owe more than you own (common early in a career, not a verdict).
4. Look at liquid net worth
Take out the home and vehicles, and the mortgage and car loan against them. What remains is what you could actually use if income stopped. Many people with a healthy headline number have a liquid figure near zero.
5. Track the change, not the snapshot
Write the number down once a quarter. A rising net worth while debt falls is the real sign a budget is working.
I built a free calculator that does all of this in the browser (no signup, nothing stored), including the change versus 12 months ago: Net Worth Calculator.
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