Net worth is simple in theory: everything you own minus everything you owe. In practice, people get stuck on the details. Should the car count? What about a 401(k) you can't touch for 20 years? What's your house really worth? Here's a practical, consistent way to calculate it.
Assets: what to include
- Cash: checking, savings, money market accounts and CDs.
- Taxable investments: brokerage accounts at current market value.
- Retirement accounts: 401(k), 403(b), IRA, Roth IRA and HSA balances. These count even though you can't easily access them yet. For a more conservative view, some people reduce traditional (pre-tax) balances by an estimated future tax rate, since withdrawals will be taxed.
- Home and other real estate: a realistic sale value. Online estimates are a starting point, and recent comparable sales are better. Some people subtract around 6%–8% for selling costs.
- Vehicles: current private-party value, not what you paid. Cars lose value quickly.
- Business ownership: a conservative estimate of what your share could sell for.
- Other: the cash value of permanent life insurance, and valuables you could realistically sell.
Leave out ordinary household items, clothes and electronics. They're hard to value and rarely sell for much.
Liabilities: what to subtract
- Mortgage and home equity loan balances
- Auto loans
- Student loans
- Credit card balances. Use the full balance, even if you pay it off monthly, for a point-in-time snapshot.
- Personal loans, medical debt, loans from family and any securities-backed or margin loans
Consistency matters more than precision
The most useful thing about net worth is its trend. Whatever method you use to value your home or car, use the same method every time so changes reflect reality rather than a new valuation approach.
How often to track it
Quarterly or twice a year is plenty for most people. Checking monthly mostly shows market noise. Write down the date and each value so you can compare over time.
How you compare by age
The Federal Reserve's 2022 Survey of Consumer Finances, the most recent complete survey, reports these median household net worths by age of head of household:
| Age | Median net worth |
|---|---|
| Under 35 | $39,000 |
| 35–44 | $135,600 |
| 45–54 | $247,200 |
| 55–64 | $364,500 |
| 65–74 | $409,900 |
| 75+ | $335,600 |
Source: Federal Reserve Board, 2022 Survey of Consumer Finances. Figures are household medians in 2022 dollars.
Use median, not average. Averages are pulled far upward by a small number of very wealthy households, so almost everyone is "below average." The median is the household in the middle.
What a negative net worth means
A negative net worth is common early in adult life, especially with student loans or a new car loan. The number matters less than the direction it's moving. Paying down high-interest debt raises net worth as reliably as investing does.
Calculate yours
Our Net Worth Calculator adds up your assets and liabilities and shows where you stand against the medians for your age. Nothing you enter is saved or transmitted.
Frequently asked questions
Should I include my home in net worth?
Yes. Home equity is a real asset and a major part of net worth for most households. Some people also track a "liquid net worth" that excludes the home, because you can't spend your house without selling or borrowing against it.
Is net worth the same as wealth?
It's the standard measure of wealth. It doesn't reflect income, job security or future pensions and Social Security, so it's one useful number rather than the full picture.