Your net wo💟rth can say a lot about your financial life. It is easy to calculate and is a quick way to compare yourself to others at your income level. Just what is net worth?

“Net worth is a key measure of financial health. It’s the difference between what you own and what you owe. It reflects not just how much money you make but how well you manage, save, and invest your resources,” says , the founder o🌠f and a 🥃certified financial planner at Sunflower Financial Planning.

How Do You Calculate Net Worth?

To calculate your net worth, you’ll need to make a list of your assets and 澳洲幸运5官方开奖结果体彩网:liabilities.

“Calculating net worth is straightforward: List all your assets—such as savings, investments, retirement accounts, and real estate—and subtract all your liabilities, including mortgages, car loans, and credit card debt. The result offers a clear 澳洲幸运5官方开奖结果体彩网:snapshot of where you꧑ stand fin𒈔ancially,” Rivilis says.

How Does Your Net Worth Compare to Others?

According to the Pew Research Center, in 2021 (the most recent data available), upper-income households had a 澳洲幸运5官方开奖结果体彩网:median net worth of $803,400, middle-income households had a median net worth of $204,100, and lower-income households had a median net worth of $24,500.

According to the 澳洲幸运5官方开奖结果体彩网:Federal Reserve, the average net worth in the United States was $1,063,700 as of 2022, an increase of 23% from just three years earlier. The median net worth rose 37% to reach $192,200 in that same year.

The most common locations where Americans held assets were transaction accounts such as checking accounts (98.6%), vehicles (86.6%), their primary residence (66.1%), and retirement accounts (54.3% ) in 2022.

How does your net worth compareꩲ for your income level? If it is lo🃏wer than you would like, there are things you can do to improve it.

“Improving net worth comes down to two core principles: increasing your assets and reducing your liabilities. Save regularly, invest for long-term growth, and focus on paying off debt efficiently. Avoiding unnecessary expenses frees up more money to grow your savings and 澳洲幸运5官方开奖结果体彩网:investments,” Rivilis says.

Why Is Net Wor𒅌th an Important Mea♎sure of Your Finances?

Measuring your net worth is a great way to track how well you 𒀰are doing financiallyಞ.

“Net worth serves as a financial progress report. Even if your income changes from year to year, a growing net worth indicates you’re building financial security,” Rivilis says. “Tracking it helps you see if your spending, saving, and investment habits are aligned with your long-term goals.”

How Often Should You Check Net Worth?

Plan on calculating yoꦍur net worth four times each year to see if you are on track with your financial goals.

“Reviewing your net worth every quarter is a good balance. It allows you to track progress without stressing over short-term 澳洲幸运5官方开奖结果体彩网:market fluctuations. If you’re working toward ꩵspecific financial goals, more frequent check-ins can help you stay motivated and on track,” 🃏Rivilis says.

The Bottom Line

Your net worth is a useful measure of ꦉyour financial life. Taking stock of your net woꦕrth every three months will help you see how well you achieve your financial goals.

To improve your net worth, bolster your assets, and pay down debts. You’ll have a stronger financial picture in no time.