How to calculate your net worth
- Make a list of all your assets. Be as thorough as you can. As well as obvious assets like your house and car, include shares, other investments, the amount in your transaction and savings accounts, superannuation, businesses, caravans and boats. Include the value of each asset in your list and be as accurate as possible with your estimates.
- Add up the value of all your assets. Use the value of each individual asset to work out the total value of all your assets.
- Make a list of all your debts. Once again, be as thorough as possible and don't leave anything out. Include your mortgage, credit card debt, car and personal loans, HECS debt, business loans and anything else you can think of. Include the amount of each debt.
- Add up the value of your debt. Use the amount of each debt to work out the total amount you owe.
- Subtract. Subtract your total debt from the total value of your assets. The number you get is your net worth.
One easier way to do this is the use an app, like the free Finder app. The Finder app lets you add all your accounts and will then automatically calculate your net worth in real time for you - no pen and paper or calculator required.
Should net worth calculation include life insurance as an asset?
Hi Jess,
This depends on what you are calculating your net worth for, but generally, it should not be included. While you’re alive, life insurance is not part of your net worth as it can’t be accessed, spent or leveraged. After you die, the proceeds of your life insurance policy become part of your estate for tax purposes.
Hope this helps!