Mint Tool: Calculate Your Net Worth

Net Worth Calculator

Have you ever asked yourself, what is my net worth? Net worth is an important metric to be aware of, no matter where you find yourself in your personal financial journey. In this post, we’ll walk you through what net worth is, how it’s calculated, the factors that go into it, and what it means for your finances.

We’ve also built a free personal net worth calculator that you can use to assess your current net worth and plan your finances for the future.

Here’s what we’ll cover in this post:

• What is net worth?
• Why it’s important
• What are assets and liabilities?
  • Assets
  • Liabilities
• How to calculate net worth
• Understanding your net worth

First, let’s get started with a clear net worth definition.

What is net worth?

Net worth is the total amount of value (in terms of money) that you own. In order to calculate your net worth, you add together all of your assets—things of value that you own—and subtract your liabilities—things with negative value, like debt. If you have a good idea of what assets and liabilities you hold, use the net worth calculator below to find yours.

• Net worth is just one factor in your personal wealth. Use our retirement calculator and investment calculator to gain more insights into your financial wellbeing.

If you’re not sure what parts of your personal finances should go into each category, don’t worry. We’ll explain more about how to calculate your net worth in a later section. But before we do, you might want to better understand why your net worth is an important part of your personal financial wellbeing.

Why it’s important

Net worth is an important metric to help you understand your financial health. For example, individuals with a low or negative net worth may hold a high amount of debt. Net worth can also be a factor when determining the rate you get on a loan and help you determine whether you’re on track to meet your personal financial goals.

Here are just a few reasons why it’s important to know your net worth:

• Understand your financial health: Net worth gives you a bird’s-eye view of your total financial picture. It can also tell you whether you owe more than your own—if your net worth is negative, you know your total debts are greater than your total assets.
• Plan better for the future: Are you interested in purchasing a home or starting a family? Then it’s a good idea to know your net worth. Knowing how much money you have to work with (and how much is tied up in debts) can help you plan more carefully and more accurately.
• Make smarter decisions today: It’s not just the future, though. Knowing your net worth can be a first step in making smarter financial moves today, such as restructuring your monthly budget or deciding where to allocate disposable income.
• Cut back on unnecessary expenses: If your net worth is low or negative due to high debts or low savings (or both), it’s often a good idea to look for places to cut back. Knowing where your net worth stands can help give you that incentive.
• Gain insight into growing wealth: On the opposite end of the spectrum, if your net worth is high, but your money is mostly tied up in assets that either don’t increase in value or slowly depreciate, keeping an eye on your net worth can help motivate you to start growing your wealth more wisely.

Before you can calculate your net worth accurately, there are a few more important pieces of information to consider.

What are assets and liabilities?

When asking yourself, “what is my net worth?” it’s important to think about your assets and liabilities. As previously mentioned, assets are things that you own that hold value, and liabilities are debts that you owe. You might not be sure which of the things that you own count as assets and which count as liabilities. Here’s a quick explainer.

Assets

Assets hold value. Cash, money in bank accounts, investment accounts, stock holdings, property, high-value jewelry, and electronics—all of these things count as assets in your personal wealth portfolio. When calculating net worth, you’ll add together all of these sources of value.

Liabilities

Liabilities are money that you owe to someone else. In most cases, this will be some form of debt, like student loans, auto loans, a mortgage, credit card debt, medical debt, or any other form of loan that you have currently outstanding.

How to calculate net worth

Once you’ve tallied your personal assets and your full set of liabilities, it’s time to calculate your net worth. You can use the net worth calculator above for a quick and simple answer. If you’re still curious about how to calculate your net worth yourself, the equation is pretty straightforward.

Simply add together all of your assets. Then, separately, add together all of your liabilities. Once you have each sum, subtract the liabilities from the assets to give you your full net worth. Here’s the equation written out simply:

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Assets – Liabilities = Net Worth

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Net worth calculation example

It can be easier to understand with an example. Let’s say you own four assets and three liabilities:

Assets

1. Savings account: $5,000
2. Checking account: $1,500
3. Retirement account: $2,000
4. Car: Valued at $2,000

Liabilities

1. Student loan: $14,000
2. Credit card debt: $1,200
3. Car loan: $3,000

To calculate your net worth based on those values, start by adding together the assets:
5,000 + 1,500 + 2,000 + 2,000 = $10,500

Then, add together all liabilities:
14,000 + 1,200 + 3,000 = $18,200

Lastly, subtract the sum of the liabilities from the sum of the assets:
10,500 – 18,200 = -$7,700

If your total assets and liabilities were equal to the example above, then your net worth would be negative: -$7,700, specifically. That’s because the total amount that you owe in this example is greater than the total amount you own.

What does that mean for your personal financial picture? Using a wealth calculator isn’t the end of the story. Let’s take a closer look at understanding your net worth in context.

Understanding your net worth

You might be tempted to think that, just because your net worth is low or negative, it means that you’re mismanaging your money. While that might be possible, in many cases, it’s not necessarily true. For example, in the example in the previous section, the main reason why net worth came out negative was because the person in question has $14,000 worth of student loans.

Having a student loan is, for many people, a debt impact on your net worth that is difficult or impossible to avoid. Plus, having a college degree opens up a number of opportunities post-graduation that you might not have had otherwise—opportunities that can yield a higher salary and higher net worth later on.

Another factor that your net worth doesn’t always indicate is how your assets are distributed and whether that’s the best possible portfolio for your wealth. For example, you might have a very high net worth, but if the majority of that is sitting in a savings account, you might not be diversifying your portfolio or allocating funds in a way that will help them grow.

Similarly, you might have a high net worth because you own property, but otherwise have very little cash on-hand, making it hard to cover daily expenses like groceries and gas for your car. In these situations, it might be helpful to understand your net worth, but then look a little deeper to see where your assets and liabilities stand—and whether there’s anything you can do to optimize your assets to your advantage.

The takeaway? Net worth isn’t the only metric to pay attention to. Your net worth provides you with key information that can help you decide whether you want to take on any more debts, focus on savings, or look ahead to getting started investing. But it’s not your full financial picture.

For a more accurate look at where your personal finances stand, it’s always a good idea to download Mint.

Tracking your net worth with Mint

The Mint app has a number of features that can help you understand your net worth and where it stands. When setting up the app, you’ll be prompted to input your various accounts, including bank accounts, investment accounts, credit cards, lenders, and more. Then, the app automatically calculates your net worth based on the data from those institutions.

Mint can also help you get a more fine-grained picture of your personal finances. The app tells you exactly where your liabilities stand, and where your assets are valued. You can then use this information to help you plan your monthly budget—or help you to create a financial plan around increasing your net worth.

• Looking for simple ways to start budgeting? Read our guide to the 50/30/20 rule for an easy—and effective—way to get your finances in order.

Net worth is a valuable piece of information to know about your personal finances. By using a net worth calculator, tracking your net worth over time, understanding where your assets stand, and considering ways to increase net worth, you can help yourself work toward greater financial wellbeing.