To use the Net Worth calculator, you’ll need to enter some details. These are explained below:
Once you have entered the details about the asset and your income, you can click Calculate My Net Worth.
To calculate your net worth simply subtract the total of your liabilities from the total of your assets. The most crucial step in determining your net worth is to accurately assess the true value of your assets and liabilities.
The simple calculation for net worth is: Total Assets — Total Liabilities
|Primary assets value||$500,000|
|Other assets value||$50,000|
|Total liabilities value||$185,000|
|Estimated net worth||$365,000|
Value of your assets:
Value of your liabilities:
This is a simple example, and your own assets and liabilities will most likely be far more exhaustive. If you need assistance determining your income, assets, and liabilities, the easiest way to track the total amount is by using the Money.com.au Budget Spreadsheet.
Net worth is calculated as the total value of your assets minus your liabilities. Adding up everything you own of significance — e.g. your home — minus all of your debts — e.g. your mortgage — will give you a clear picture of your net worth and true financial status. You can use this figure to improve your net worth: reducing your liabilities while growing your assets.
If your calculation equals a negative figure this could simply be the result of being a young earner with a student debt only working casual hours for three years. Alternatively, your net worth could be getting brought down due to a number of debts that now require your attention.
You can increase your net worth in two ways: growing your assets and reducing your liabilities. Grow your assets through non-depreciating assets, such as property, shares, or savings accounts. Reduce your liabilities by paying off credit cards, loans, and creating a budget plan to manage and reduce debt.
You might find it useful to calculate your net worth at the end of each month. You can use the Money.com.au Budget Spreadsheet Template to track the net worth figure in Excel to watch it grow over time, month by month. As a minimum, you should calculate your net worth once a year or after any significant changes — such as selling your house — to keep a close eye on your overall financial situation.