How to Calculate Your Net Worth & Why You Should

Your net worth is a better way to accurately see the big picture of your finances and it is what financially savvy people use to track their progress.Ok we are going to kick things off by helping you calculate your net worth.

Don’t worry, it is going to be easy, and you can probably do it in about 20 minutes or so.

The reason we are starting with this is because it is how we are going to measure the success of the rest of this course – as well as all the other great financial decisions that you are going to be making from now on!

Your net worth is a better way to accurately see the big picture of your finances and it is what financially savvy people use to track their progress.

The simple definition of it is:

Assets (stuff you own) – Liabilities (debts) = Net Worth

It is simple to calculate and I will get to that shortly, but first…

1Why Net Worth rather than just debt?

Your Net Worth is more encouraging

The primary reason for using your Net Worth as a gauge of your financial progress rather than the amount of debt you have is because it is more encouraging. When you look at your amount of debt to track progress, you are only seeing the fruit of paying down those debts. On the other hand, your Net Worth increases for every good financial decision you make.

For example, you can increase your Net Worth with the following actions:

  • Paying off credit cards or car loans
  • Paying more towards your mortgage
  • Buying property
  • Funding a Roth IRA
  • Contributing to your 401(k)
  • Building an emergency fund
  • Buying index funds, mutual funds, or dividend paying stocks
  • Or even just not spending as much money

There are many more things you can do to increase your Net Worth, but these are some of the bigger and more common ones.

2It changes how you think about buying decisions

The second reason I prefer to use my Net Worth to track my progress is because I have found it helps change how I think about my buying decisions.

One of the most valuable financial lessons I have learned can be summed up in two words: buy assets. What I mean by that is you should spend more of your money on things that will keep cash in your pocket. So they should at the very least:

  • maintain their value,
  • but better yet increase in value
  • and the best would be increase in value and provide you income as well.

On the other hand, you should avoid buying things that are going to take cash from your pocket. Coincidentally, these are most of the things most of us spend our money on. When you buy clothes, food, electronics, decorations, cars, entertainment, you are (generally) using cash for something that is going down in value and therefore decreasing your Net Worth. Examples of this would be:

  • Spending $200 on new clothes
  • A $50 steak dinner
  • Getting the new iPhone
  • Going to the Yankees game
  • A brand new BMW

Think about how much you could sell each of these for 2 years from now. Each one of them is a depreciating asset, so 2 years later they would not be worth what you paid for it, if anything at all. But if you had spent it on…

  • Buying property
  • Funding a Roth IRA
  • Contributing to your 401(k)
  • Building an emergency fund
  • Buying index funds, mutual funds, or dividend paying stocks

You would have a much better chance that it would be worth at least what you paid, and it would more than likely be worth more than you paid for it.

Obviously there is more to life than Net Worth, and you can never avoid spending money on depreciating assets, but you can avoid spending ALL of your money on depreciating assets. This is the key to why many people never get ahead financially. They spend all of their money on stuff that goes down in value. Once you start buying things that increase in value, you begin building a snowball that just grows larger and larger, faster and faster.

I don’t want to get the cart ahead of the horse, so lets get back to our Net Worth. The reason I mentioned this is because I want you to be thinking about the end result of each buying decision. None of the things listed above are necessarily wrong, but they should be thought about and decided upon rather than just reacting to what you “feel like doing”. Your Net Worth will reflect each buying decision that you make – good or bad.

How to calculate your Net Worth

There are 2 ways that I’ve used to calculate my net worth.  The new way that I have been using is by using Personal Capital. Basically it is an extremely secure website that allows them to monitor (not make changes) all your financial accounts in one place.  It is completely free to use, and provides a great snapshot of your overall financial picture.

It is the quickest and easiest way to calculate your net worth and continually monitor it over time.

All you need to do is:

1Create your free account with Personal Capital

To see more about what they do check out this video:

2Add all your financial accounts: banking, investments, credit cards, mortgages, etc.

Just click the “+Link” button in the left corner.

adding personal capital accts

Then you will see a popup box that looks like this and from here you can search for each of your accounts.

add to personal capital

Unless you have a ton of accounts, you can probably do this in under 10 minutes and then you will have your net worth nicely displayed to you as you can see in this screenshot below.


And unfortunately, this isn’t a screenshot of my personal account (but rather a healthy demo account).

Figuring out net worth with personal capital iphone app

They even have an iPhone app, so you can calculate your Net Worth while you are sitting in the doctor’s office.

My Old Method of Net Worth Tracking

Before Personal Capital came along to automate this process, I used to just do it manually every 6 months or so in a spreadsheet.  I  have created a template from my own balance sheet that you can use if you would like. You can download it here.

1. Get a spreadsheet

First off, you can do this on paper if you really want to, but I suggest Excel, Google docs, Open Office, or really any kind of spreadsheet will do.

2. Total your assets

List every asset you can think of. Anything that you could realistically sell. For the purposes of sanity and simplicity, I don’t bother with items under about $500. Yea, I am sure I could find someone on Ebay to buy my socks, but I am just looking for a general picture. So I just lump together all these smaller items as one line called “Misc items” and take a conservative guess of what they could be sold for.

So your house, cars, retirement accounts, stocks, savings accounts, checking accounts, emergency fund, jewelry, and anything else similar would fall in this assets category.

To get real estate values you can use Zillow to get a decent estimate of what your home may be worth. For automobiles you can check out Kelley Blue Book to see what they could be sold for. For all your checking, savings and investment accounts you can either check the balances online, or just use your last statement.

Once you have them all listed with the estimated selling/liquidation value you can total them up.

3. Total your liabilities

A few lines below the Assets total, we are going to now list every debt you have. Mortgages, credit cards, student loans – they all apply. Do the same as above, checking balances on each one and then total your debts to get your liability total.

4. Subtract them

Now you can subtract your liability total from your asset total and viola! You have your Net Worth. Date it and save it.

Now what?

When I first calculated my Net Worth, it was -$13,843.84. This was eye-opening to me. I knew I had a bunch of debt, but didn’t realize how below par I was. Regardless of what your number is, just look at it as the starting point. It is from this point that it will become larger.

After we had been working at it for one year, it was up nearly $15K to +$746! We were so excited to have a positive Net Worth! Even if it was only $746. As we kept on working on it, it has just continued to grow.

I normally check on my Net Worth two times a year. But if you are working really hard at it and need to see the encouragement of it increasing, do it more! As in just about anything, you are either moving forward or you are going backwards. If you are increasing your assets by making good buying decisions or minimizing debts, your net worth will be growing.


Your homework tonight is to calculate your Net Worth, using either Personal Capital, a spreadsheet, or a pencil and paper.
For more on Personal Capital’s free tool check out this video:

  1. Tim @ Faith and Finance

    Great challenge Bob. Buying assets is one of the best long term money moves that someone can make. While buying assets may not add to your net worth right away, you’ll eventually start to see the added value over time (as it appreciates or as it brings in more income).

  2. Michael Farris

    Nice job Bob. Well said and I’m proud to be a part of this website.
    God Bless. – Michael

  3. Azra Panjwani

    Hi Bob, really enjoyed reading this article. You’re right, debt is that big anchor that completely drags down your networth and it’s hard to plan for the future when you’re constantly ‘in the red’ That’s why we’re so comitted to helping people pay it off so that they can focus less on the ‘negatives’ and more on the ‘positives’ in finances and life in general!

  4. Mica Whitifield

    This was really helpful and I plan on using this tool more often. However, I have a large student loan so it was a bit discouraging to me because it seems almost impossible to ever have a positive net worth with it.

    • Jonathan K


      Seems like for the next few years you will need to cut down to the bare minimu. Are you on a budget? Do you have a diploma/degree?

      Have you considered moving back home with family or getting a roomate to cut expenses for a while?

      What about cooking food intead of eating out?


    Thanks very much Bob,
    It is very promising even by it`s explanations.I should practice it in order to save me and my group in future.
    God bless you Bob.
    Thanks A lot.

  6. terry

    What if you don’t have any assets?

    • Jonathan K

      Then that means your have a negative net worth. For example: You owe $25,000 on a student loan. However, that is not a bad negative net worth to have as long as you have a degree to show for it.

      Do you not have a computer or vehicle?

  7. char

    I am a newlywed, and my husband has extreme money issues. He works contruction and where we live the prospects are not good. I have a stable monthly income where as his is not. I am a saver, whereas because of commitments he literally lives on his relationship to God and prayer and the hopes that a paycheck will come in. I am not prepared to take over any of his debt/child commitments and he is aware of that. We are very much agreeable to doing a household budget but I do not want to seem like the “commander”. Any tips?

    • John Frainee

      Char, you may want to consider doing financial coaching. If you’re looking for free options, there are a lot of great articles on ChristianPF. Just go up to the top of the website and search for “marriage”. I encourage you to see your husband’s commitments as your commitments. After all, you are married!

  8. Sara

    I am paying loans for my house. Is my house considered as assest or liability?

  9. Tania

    Great article! Thank you so much for sharing this information, all of your articles have helped me re wire my thinking about money. I’m actually excited to finally tackle my debt. 🙂

  10. shindu s brown

    its very beneficiary to helping me save more money and to determine.were its been going.

  11. Sello Mokotjo

    I truly appreciate the wealth of information I receive from you, guys, Truly, God is great. In my country many people are over-indebted and I believe had they received this information, I believe they they would have been free from the bondage of debt. For that reason I commit myself to run free seminars to distribute the information to them. I will visit your site for not less than two hours everyday to learn more. God bless you with your wonderful work. Regards. Sello Mokotjo(SouthAfrica )

  12. Tracy

    I am just beginning to use Christian PF and am very encouraged so far. Things financially tough right now for me and my 2 children but I am determined to make it better. Thanks for all the great advice.

  13. Kirsten

    Thinking of spending “extra” cash on either new clothes, a big dinner, or an IRA or savings really puts things in perspective!! Now I can ask myself “Will this help my net worth? Will this help me get out of debt?” Before we would just say, “well, we’re already behind, what’s a 25 dollar dinner going to do to us? Hurt our net worth!

  14. Penders

    Hi Bob,

    This article was great. Never thought of calculating my net worth. Always calculate how much I owe, never what I’m worth. It was very encouraging to create my net worth sheet (it’s not as bad as I thought it would be) and it gives an overview of what debts we need to take care of first. It really puts things into perspective as my husband and I go on this journey to wealth and create an inheritance to leave for our children. If there is no NET WORTH there is nothing for our children to inherit. Thanks for shedding light on this. I am truly learning so much about finances. God bless you Bob and I pray a one hundred fold return for all the info you are sowing into our lives through this site.
    ~Pender Family

  15. Gui

    Hi Bob, incredible articles. And to think that I just googled out a better spreadsheet than mine as I was having issues with mine for prior balances, etc and a better control of my finance. I was really surprised to find this website (been here for the last 2-3 hours) and at first I was really intrigued why you were doing all of this for free (I know there are ads and other strategies behind), but still. Very good info, reliable, and helpful. Also I noticed you are a Christian, of course, so you mentioned those words in helping others. I truly appreciate and it must be very rewarding and satisfying to build up your finance and still help others. I’m sure you have an easy sleep every night like I do. I suppose the worst nightmares are debts, debts and debts $$$$$ hehe. I’ve been there before, now I am fresh to zero. Just transferred in to USA from Brazil.

    Well, story short, I have a question. I am currently leasing an apartment for 11 months since Dec. 2012. Should I include it on the liability and for the full amount? So 9*X = Y? add the Y in the liability? I assume so as I need to pay it until its over, but then I can move out, or do whatever I want before that. But then I guess I would update the balance sheet to the new rental or mortgage, right?

    Thanks in advance!!!

  16. Andrea

    Very informative and interesting. Thanks!

    • Tina

      Thanks so much Bob. This is an eye opener to what am suppossed to buy in order to increase my net worth. Am not yet through with the calculation,however if there is any difficulty I will contact you.
      God bless you.

  17. Anastasia

    Thank you so much for what you do, it is an absolute blessing to me. Your home work assignments are making me really think about being a good stewart of my finances and ways to get it on the right track.
    God richly bless you

  18. Genevieve

    The easiest way to do this is to join Mint and they do it for you. You have to give up all the log-ins to your accounts so you have to be comfortable with that.

    • Bob

      Yea Genevieve, isn’t a bad option, but it will likely take a bit longer to get all your accounts added and you will probably need to still add additional items to the total to get an accurate net worth figure. Mint does have top-notch security, but that is an additional concern for some folks as well.

  19. denise

    It was Divine Intervention that lead me to your site. Thanks so much for the wise advice. May God bless you abundantly!

  20. Adrian

    I am so blessed and excited to find this website !! it has all the answers to my financial questions and as a bonus its a christian webs ite with Biblical principles. Bob may the Lord richly bless you and may Hie face shine upon you! As i orogress with the basics, I will be joinung gour courses online. I am.from India ajd some things ljke 401k etc are alien to me but no issues there I will.learn about them.nd qdapt them to my country. excuse the errors. using my touch screen smart ohone is a bit of a trade off as I do nit have wifi on my rig in.the desert!!

  21. Raynna

    Thank you Bob!

  22. ken

    asset or liability? just because something has “value” does not mean it is an asset. “value” can disappear like Enron profits.
    better learn the difference real quick in my opinion.

  23. fahemin

    Thanx bob. This will really help us to increase networth.

    God bless you.

  24. Christine

    That is very encouraging. After deducting the mortgage debt, I am very long on assets.
    However, the challenge is to pay the mortgage as I need a good income to pay it every month. I am trying to supplement my income through my websites and work.

  25. mc

    Never spend more than what you earn.. Its like a button and the button hole in your shirt. , it will devastate your shirt if you will use bigger button than to the button hole. spend intelingently, network computation will be a great help. its must to know.
    Thanks Bob. God Bless.

  26. Ben

    Bob, I must admit , God has really use you as an eye opener to me.Currently am a banker and I thought I hav all worked out for myself till I found you a gem of an adviser.
    Thanks man!

  27. Diane

    My husband and I just started your course. I’m not sure if a mobile home is an asset. We do not own the land but we do own a 5-year old double-wide mobile home. We live in a mobile home park. Since it has a vehicle title rather than a real estate deed, is it an asset or of no value on the balance sheet?

  28. Deb

    My husband & I are recently both retired. We have approx $100k invested. My husband receives a pension & we both receive soc sec. We have monthly payments over $750 for car, cycle & credit card. We’re thinking about cashing in a Roth Ira of $13k, to pay off those loans, which would then allow us to save that each month instead of paying out. We would be able to save approx $2500 a month. Do you think this would be a wise move? If we cash in any other investments we would have to claim as income & pay taxes on it. Thank you!

  29. Cass E

    I have adored this website so far! Its such a blessing! My and husband and I have been able to get out of 20K of debt in two years thanks to these principles and God had completely opened our hearts and wallets to tithing. Another awesome resource is The website keeps track of your budget and updates your net worth every day! Its awesome!!!!

  30. James

    Bob –

    Thank you so much for what you do. I consider myself to be somewhat savvy when it comes to finances but I am constantly learning new things on your subscription emails and website. Today’s article is an example. I never thought to look at my net worth, as I was so caught up in paying off my debt. When I calculated my assets and liabilities, I was very pleased I was not nearly as bad off as I thought I was. I am actually well onto the positive side and will be improving quickly now for paying off debt and building my emergency fund.

    I still have a long way to go where I want to be, but I have a blueprint now to make that happen. Thank you again! May God bless you and your family.

    • Bob

      Awesome, great to hear it James! God bless you brother!

  31. Esther Eyere

    Thank you for sharing. Very informative and practical. Have a blessed day!

  32. Justine

    I am a blessed person to having known Bob. My eyes have began to see where I have been missing. I will use this teaching to move forward in life. God bless you Bob.