Net Worth Calculator
Use this net worth calculator to show where you stand financially. Net worth is defined as the total of your assets (everything you own) minus your liabilities (everything you owe).
Whereas an income and expense statement shows your cash flows, the net worth statement or balance sheet shows your assets.
Starting at the top and working your way down, complete the totals for each of the six sections. Once you've completed the entire worksheet, click on the "Printer Friendly Report" button at the bottom so you can print-out and compare to your other net worth statements to track your progress.
Security Note: This calculator operates in your browser (unlike competing calculators that store private info on servers). With this calculator the information you enter never leaves your browser on your personal computer thus protecting your privacy.
Finally, if this calculator helped you then please like, tweet, or +1. Thanks for your support!
How To Calculate Net Worth
A net worth statement is simply a personal balance sheet. It shows you where you stand financially.
It is a summary of your assets minus your liabilities. In other words, your personal net worth is calculated by listing all that you own and all that you owe.
Before you determine your net worth, you will want to gather together all your available financial documents, which includes your recent bank and loan statements. Once you have all of that information available, start the calculation by listing all of your assets with the values. Add together all your assets to get your total assets. Your goal should be to continually increase your assets which will include the following:
You should not include an inheritance that is actually not there. A lot of things can change between now and then so count only your assets on hand – not planned assets for the future.
The next step to calculating net worth is to subtract liabilities from assets. Liabilities are defined as everything you owe. Subtract all of your debts including your mortgage, auto loan, and credit card balances from your total assets.
The total figure remaining at the end is your personal net worth (or personal balance sheet) and provides a snapshot in time showing how rich or poor you are today. This figure may be small, large, or even a negative number; however, the important issue is that now, you know a bit more about your financial picture and can take steps to improve it.
3 Common Mistakes To Avoid When Using A Net Worth Calculator
Whenever you calculate net worth it is critically important to measure both assets and liabilities. A common mistake is to forget to net out the liabilities thus showing only assets which inflates your financial picture. Net worth is correctly calculated by subtracting liabilities from your assets to represent a complete, personal balance sheet.
Another common mistake that makes your net worth calculation inaccurate is to accidentally not include all relevant data. The value of this balance sheet template above is it prompts you for the various items that should be included so that you don’t leave anything out thus increasing accuracy.
Finally, it is not uncommon to show a negative net worth statement. Of course, this means you owe more than you own which can be frustrating and cause you to skip the net worth calculation in future years. While this situation is unfortunate, it is important to continue calculating net worth every year as explained below…
Why Calculate A Net Worth Statement?
The reason to calculate your personal net worth is you can only improve that which you measure. By using this balance sheet template and calculating net worth every year you will have a running snap shot of how your financial picture is improving over time.
How Can I Increase My Net Worth?
You can increase your net worth by reducing your debt and/or increasing your assets.
Dollar for dollar, reducing debt and increasing assets has an equal impact on your net worth and are both equally important. However, reducing debt is limited since you can only go to zero; whereas, increasing assets is unlimited. Thus, it is valuable to pay attention to both, but focus on the asset column for maximum long-term benefit.
Another good practice is to update your personal balance sheet at least twice per year so that you can compare the figure with the previous year’s calculations and measure progress. That which you measure and focus on is what you will improve.
Determining your net worth is more than just knowing how much you have. It’s also an indicator for determining whether or not your assets are increasing over time.
If you’re net worth calculation is increasing every year then you are on the right track. However, if your net worth is only holding steady or declining, you should start identifying the causes and think about how you can improve your financial condition. The education programs on this site can help.
Net Worth Calculator Definitions:
Other Personal Finance Calculators: