How to Calculate Your Net Worth

Guide G-230
Constance Kratzer, Family Resources Management Specialist
College of Agriculture, Consumer and Environmental Sciences New Mexico State University. (Print Friendly PDF)

One way to plan your financial future is to calculate your net worth once a year. Annual net worth statements measure your financial progress. After assembling the information necessary for the first one, it is simple to update it each year. Many people find their total financial worth greater than expected, if they have never calculated it.

What is a Net Worth Statement?

A net worth statement is a way to measure your overall financial position. It compares assets (what you own) and liabilities, (what you owe).

Assets are cash and items that have substantial value. Examples are savings accounts, a home, other real estate, cash value of life insurance, retirement or profit-sharing plans, cars, stocks and bonds, and other possessions that can be converted to cash.

Liabilities are monies that you owe. These can include the unpaid balance of a home mortgage, other mortgages, balance of automobile loans, installment debts, outstanding charge accounts, unpaid bills and unpaid taxes. The difference between assets and liabilities is your net worth or net indebtedness.

Young couples sometimes find they have a negative net worth. When they are in the process of establishing a home and acquiring possessions, their debts can be greater than their assets.

Some assets may appreciate or gain value, such as your home, stocks or retirement plan. Others depreciate or lose value, such as automobiles or furniture. Your net worth will change periodically, depending on the appreciation or depreciation of your possessions and property, the amount of assets accumulated and the amount of debt you incur.

Why Make a Net Worth Statement?

A net worth statement is an important tool in analyzing your financial situation and checking your financial progress. It will show whether you are getting ahead financially. It gives you an overview of your situation and can serve as a guide in budgeting your expenditures and analyzing your credit use. Have you increased your assets to increase your worth or have you taken on additional debts that reduce your worth?

It is useful in making financial decisions about savings, amount of insurance needed, investment plans, retirement goals and estate planning. It makes estate settlement easier for survivors. Overall, it is a guide to help establish financial goals and manage money to achieve those goals.

When should you make a net worth statement? Start now by using the form in this pamphlet as a guide. Then select a time to update it each year. Many people like to do this in January when they have year-end figures for taxes, but it can be done any time. You can adapt this form to your needs by listing your assets and liabilities on paper or ledger sheets.

How to Make a Net Worth Statement

Your assets should be valued at today’s prices or current market value, not what you paid for them. Set the value at what you could receive if you sold them today. If this is your first net worth statement, it may take a little time to get some of the figures. Once one statement is done, it is easy to update each year.

A home, other real estate and investments are assets that are most likely to appreciate in value. Ask a real estate agent for an estimate or you can check prices on similar homes in similar neighborhoods. Do not subtract what you owe on your home or other assets. The debt will be listed under liabilities.

Furniture, equipment, automobiles and other vehicles usually are worth less than you paid for them unless you have valuable antiques or classics. Be realistic in placing a value on things like furniture. Your beautiful sofa or dining room table is probably just another piece of used furniture to a buyer. For automobiles, recreational vehicles and boats, check with a dealer. Bank loan officers also have so-called blue book price guides for vehicles.

The cash value of life insurance policies, not the face value, is the amount to use. If a cash value table is not included with your policy, ask your insurance agent. For annuities, ask for the surrender value.

Check the financial pages of a large newspaper to get the current value of stocks, mutual funds and bonds. Call your stock broker if you do not find these in the financial pages.

For company retirement, pension or profit sharing plans, use the amount that would be available to you if you should quit your job. Check with your employer or personnel department if you do not have this figure at home.

Be conservative in placing a value on personal possessions. It is probably best to list only items, such as expensive jewelry, valuable art, antiques, important collections and expensive equipment. Items, such as clothing, have little value when sold.

Calculating liabilities is a matter of totaling your debts. Include the amount owed on your home and other real estate. List the outstanding balance on credit card accounts, charge accounts, installment loans and personal loans. List any current unpaid bills. Subtract your liabilities from assets to determine your net worth.


  • Are you acquiring assets that add value or are you using your income for items that depreciate or do not contribute to your overall financial worth?
  • Look at your debt load. Is your credit use excessive?
  • How liquid are you? Do you have assets that can be quickly converted to cash in an emergency?
  • Do you have enough income-earning assets to increase your net worth on a regular basis? If most of your assets are nonincome earning you may need to evaluate your spending patterns.
  • Do your assets reflect your goals? If not, what changes should you make?

Date ____________________
Cash and Savings Home mortgage  
Cash and checking accounts   Other mortgages or notes  
Savings accounts   Installment debts  
Certificates of deposit    
U.S. savings bonds   Credit cards and charge accounts  
Money market accounts    
Other   Other loans  
Investment Assets Taxes not withheld  
Stocks   Past due rent, interest  
Bonds   Amount borrowed on life insurance  
Mutual funds    
Government securities   Other  
Employee stock options    
Cash value of life insurance   Total Liabilities  
Surrender value of annuities    
Income-producing real estate   Net Worth (assets minus liabilities)  
Retirement Assets    
Pension or profit sharing plans      
IRA’s/Keogh accounts      
Employee savings plans, 401 k’s      
Non-income Earning Assets    
Home (market value)      
Other non-income real estate      
Furniture and equipment      
Autos (market value)      
Recreational vehicle, boat, etc.      
Total Assets      

To find more resources for your business, home, or family, visit the College of Agricultural, Consumer and Environmental Sciences on the World Wide Web at

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New Mexico State University is an equal opportunity/affirmative action employer and educator. NMSU and the U.S. Department of Agriculture cooperating.

Revised and electronically distributed April 2003, Las Cruces, NM.