How to Find Your Net Worth
Knowing your net worth is important for a number of reasons. It allows you to fully understand your current financial situation and gives you something to reference for measuring your goals. Essentially, as you continue earning and saving money your net worth will grow. To keep tabs on it you should calculate your net worth once or twice a year.
If you’re wondering how to find your net worth it isn’t that complicated. You simply look at two areas of your personal finances.
First, list your assets or the things you own. This can be everything from money in your bank accounts to cash value on insurance policies. Once you’ve done that, list your liabilities like mortgages, student loans and any other items you own. To find your net worth you subtract your liabilities from your assets and viola!
Net Worth Calculators
You don’t have to know how to find your net worth manually without a calculator either. There are plenty of net worth calculators out there that you can use for free. If you want to use a net worth calculator they are pretty easy to use.
How to Find Your Net Worth With a Calculator
Most net worth calculators, like this one, will have your assets listed on one side and your liabilities listed on the other. You enter each asset and each liability on the list and your net worth will be calculated once you’ve entered all your information. The median household net worth in the United States is over $100,000.
Building Your Net Worth
Now that you know how to find your net worth you may be wondering about how to build your net worth. There are a few small things you can do to start building your net worth today:
- Start an emergency fund. Having an emergency fund is a key part of being financially well. It will save your finances if you ever hit hard times and it will also contribute to your overall net worth.
- Pay down your debt. If you want to increase your net worth you will also have to pay down your debt. As mentioned above, you take the liabilities away from your assets, so if you pay your debt down your net worth will grow.
- Practice frugality. You can also grow your net worth by practicing frugality. If you spend less money you’ll have more in savings or more to put towards your debts, effectively raising your net worth.
- Start investing. Investing is another great way to build your net worth. Investing is another way to save AND make money, both of which help increase your net worth.
- Find ways to increase your income. Obviously, another great way to increase your overall net worth is to find ways to increase your income. This could mean asking for a raise or taking on a part-time job but either way it is a great way to grow your net worth!
Knowing how to find your net worth and how to make it grow are important things to know when it comes to personal finance. Find your net worth and start improving it today!
Do you know what your net worth is?
Photo: Tax Credits
Like Us? Sign Up!
Subscribe to get the latest budget buzz via email.