How to calculate your net worth
I know it sounds like an old persons word but figuring out what your NET WORTH is can be fun.
Let’s see how you can calculate your net worth, is quite easy.
1. Add up your debts.
Gather all the data on what kind of debts you have. Student loans, car loans, credit card debt and even that Best Buy card you are paying off your laptop on (or am I the only one here?). Add up all the figures and write that total down.
2. Add up all your assets.
What’s an asset you ask? It’s anything you own, basically. But we won’t count things like your TV or furniture since what you’ll be able to sell it for is far less than what you paid for it. You can count things like your vehicle or house (if you own or are in the “process” of owning it) but obviously the most basic asset (and king of all of them!) you have is CASH. Do you have money in the bank? Add up these numbers and prepare to figure your net worth.
3. Subtract your debts from your assets.
Simple, right? Maybe you are overjoyed to see the dollar amount you got! Hopefully that’s the case. It’s not so much for me…yet! But I definitely have a plan and am on track to get where I want to go. So consider your amount and ask yourself if you’re happy with that? Are you OK with the fact that when it comes down to it the money you have in your bank is almost “not yours” just because you should or could be using it to pay off a debt you owe someone else? Or maybe you’re truly happy because you either don’t have debt or you’re at least on the right side of zero.
Calculating your net worth isn’t meant to be an exercise you dread or even one that makes you feel depressed if the number isn’t what you want it to be. Use it to inspire you and motivate you to action. If your net worth isn’t what you’d like it to be than the next time you go to buy something or make a decision regarding your finances think about that number and let it guide you.