Net worth isn’t just for the wealthy — everyone has one. Learn how to calculate yours, track progress as you age and grow your financial future over time.
Net worth is a key measure of your financial health, calculated by subtracting your liabilities from your assets.
You can improve your net worth over time by boosting savings and investments, paying down high-interest debt and building equity in your home.
Younger adults typically have a lower net worth than older adults, who have had more time to accumulate wealth and pay their debt.
Just as you might measure your heart rate or blood pressure to check on your physical health, calculating your net worth — and how it changes over time — offers a clear snapshot of your financial health.
Yet nearly 70% of Americans don’t track their net worth, according to a CreditKarma survey. Why? Many assume it only applies to rich people. In reality, it’s an essential metric for everyone, no matter your income or life stage.
Here’s how to calculate your net worth and why it’s such a powerful tool for achieving goals like buying a home, investing or planning for retirement.
Net worth is the difference between the value of everything you own (your assets) and what you owe (your liabilities). Think of it as your financial balance sheet at a given moment.
A positive net worth indicates that you own more than you owe, while a negative net worth signifies your debts exceed your assets. Because both assets and liabilities shift over time, your net worth is rarely static.
Young adults typically have a low or negative net worth that grows as they build savings, invest and pay down debt over time. For many, net worth peaks around retirement age and may decline later as you begin drawing on your assets.
It’s as simple as three steps:
1. Add up all your assets, such as:
2. Add up all your liabilities, such as:
3. Subtract your liabilities from your assets. The result is your net worth
According to the Federal Reserve’s most recent Survey of Consumer Finances, net worth varies widely by age, with the median peaking between 65 and 74. Note: Average net worth skews higher because a small number of ultra-wealthy households raise the mean.
|
Age |
Median net worth |
Average net worth |
|---|---|---|
|
Less than 35 |
$39,000 |
$183,500 |
|
34-44 |
$135,600 |
$218,700 |
|
45-54 |
$247,200 |
$975,800 |
|
55-64 |
$364,500 |
$1.57 million |
|
65-74 |
$409,900 |
$1.41 million |
|
75 or more |
$335,600 |
$1.62 million |
|
All ages |
$192,900 |
$1.06 million |
Age
Less than 35
Median net worth
$39,000
Average net worth
$183,500
Age
34-44
Median net worth
$135,600
Average net worth
$218,700
Age
45-54
Median net worth
$247,200
Average net worth
$975,800
Age
55-64
Median net worth
$364,500
Average net worth
$1.57 million
Age
65-74
Median net worth
$409,900
Average net worth
$1.41 million
Age
75 or more
Median net worth
$335,600
Average net worth
$1.62 million
Age
All ages
Median net worth
$192,900
Average net worth
$1.06 million
Fun fact: When adjusted for inflation, millennials today actually have a higher net worth than Gen Xers or Boomers did at the same age, according to LendingTree.
Net worth isn’t just a number; it’s a tool for making smarter financial decisions. Unlike income or credit score, net worth gives you a complete view of your financial picture by showing how your assets and debts balance out. That clarity can help you:
In short, net worth matters because it ties together all aspects of your financial life into a single, trackable metric — one you can actively influence to bring big goals within reach.
Growing your net worth means boosting assets, lowering liabilities — or ideally both. Here are practical ways to do that:
Net worth is the total value of your assets minus your liabilities at a specific point in time. Income, on the other hand, is the money you earn over a period of time (weekly, monthly or yearly). A high income can help you build a higher net worth, but it’s also possible to earn a lot and still have a low or even negative net worth if debt outweighs assets.
Yes. If your debts are greater than your assets, your net worth will be negative. This is common early in adulthood, especially for those with student loans or new mortgages. The good news: As you pay down balances and build savings, your net worth can shift into positive territory.
Absolutely. The key is living within your means. Even on a modest income, you can boost net worth by paying off high-interest debt, consistently setting aside savings and building assets like home equity over time.
Once or twice a year is enough for most people. Checking too often may not show meaningful changes, but reviewing annually (or at major financial milestones) helps you track long-term progress and adjust your goals.
No. Credit scores are based on factors like payment history, credit utilization and length of credit history, not your total net worth. However, improving your net worth often goes hand-in-hand with good credit habits, like paying down debt.
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