Net worth is everything you own minus everything you owe, both at today’s prices. Add cash, investment and retirement balances, your home at its current sale value, and vehicles at resale; subtract the mortgage, auto and student loans, and card balances you carry. The result can be negative, and early on it often is.
The subtraction is trivial. The judgment calls are what counts, at what value, and which of the two resulting numbers you should actually steer by, and those three questions are where most people’s calculations quietly disagree with each other.
If you have avoided adding it up because you suspect the answer will sting, one reframe helps: the number is a starting line, not a grade. The Federal Reserve’s 2022 Survey of Consumer Finances puts the US median household at about $192,900, and that median hides every age and stage on the way there.
What counts as an asset, and at what value?
Anything with a market price, valued at what it would fetch today. Cash and savings at face value. Brokerage accounts, funds, and crypto at current prices. Retirement accounts at their full balance, even though pre-tax withdrawals will owe income tax someday; that is the standard household-balance-sheet convention, and it is how the Fed’s own survey counts them. Your home at a realistic sale price, and vehicles at resale value, not what you paid.
What stays out: pensions and Social Security. They are income streams without a balance, so the convention excludes them, which quietly understates anyone with a good pension. Income itself also stays out. Net worth measures the stock of wealth, not the flow, which is why a high earner who spends everything can trail a modest earner who saves.
On the debt side, count what you owe today: mortgage and HELOC balances, auto and student loans, cards you carry month to month, and anything owed to family, medical providers, or the IRS.
What does a real household balance sheet look like?
Here is a worked example through our net worth calculator engine: a homeowner household with $20,000 in cash, $40,000 in a brokerage account, $130,000 across retirement accounts, a $420,000 home, and $18,000 of vehicles, against a $310,000 mortgage, a $9,000 auto loan, and $22,000 of student debt.
The engine also reports the ratio between the two stacks: this household’s debt-to-asset ratio is 54.3 percent, meaning debts claim a little over half the asset base. Under 50 percent is a common comfort zone; over 100 percent is negative net worth by definition.
Why compute net worth excluding home equity?
Because you cannot spend a kitchen. The worked household’s $287,000 net worth includes $110,000 of home equity ($420,000 value minus the $310,000 mortgage), wealth that is real but reachable only by selling or borrowing against the place you live. The remaining $177,000 is the deployable number, and it is the one that answers most planning questions: how long you could survive a job loss, what a retirement drawdown could tap, how close your invested assets sit to a FIRE number.
The gap between the two figures is also a useful diagnostic. A household whose net worth is almost entirely home equity is wealthy on paper and illiquid in practice, which usually argues for building the investment side before adding more house.
How does your number compare, and should you care?
Compare against the median for your age, then mostly stop comparing. The Federal Reserve Bulletin’s 2022 SCF figures show how steeply the median climbs with age:
| Age of household head | Median net worth |
|---|---|
| Under 35 | $39,000 |
| 35 to 44 | $135,600 |
| 45 to 54 | $247,200 |
| 55 to 64 | $364,500 |
| 65 to 74 | $409,900 |
| 75 and older | $335,600 |
A 30-year-old at $50,000 is above the median for their group while sitting far below the all-ages figure, which is exactly why the age cut matters. Our net worth percentile calculator places your number on the full distribution and against your age group’s median in one step, and our net worth by age data study puts the average and the median side by side for every band and explains the gap between them.
Then let the comparison go. The survey is a snapshot of other people’s circumstances, not a verdict on your plan, and the only line on the chart you control is your own.
What are the common mistakes?
Valuing at purchase price. The car you bought for $32,000 is worth its resale value today, and the house you bought in 2019 is not priced in 2019 dollars either. Today’s prices on both sides, or the number means nothing.
Skipping debts to feel better. A net worth that omits the student loans is just an asset list. The subtraction is the entire point, and watching debt shrink is the most motivating part of tracking: every extra payment moves the bottom line dollar for dollar, which is the quiet scoreboard behind every debt payoff method.
Changing the method between measurements. Adding the furniture this quarter and dropping it the next makes the trend unreadable. Pick simple rules, write them down, and reuse them.
Reading a negative number as failure. Student debt against a young career routinely produces negative net worth in your twenties, and the same debt usually financed the earning power that turns it positive. Direction over level.
Counting windfalls before they exist. Expected inheritances, unvested equity, and maybe-bonuses are not balances. If it could evaporate without your consent, it stays off the sheet.
Your net worth checklist
- Every asset is valued at today’s realistic sale price, every debt at today’s balance.
- Retirement accounts are in at full balance; pensions and Social Security are out.
- You know both numbers: total net worth and the figure excluding home equity.
- The calculation repeats quarterly with identical rules each time.
- Comparisons use the age-group median, once, and then the trend takes over.
The bottom line
Run the tally once in our net worth calculator, send the result to the percentile calculator for context, and put a repeat in your calendar for next quarter. The first number is just a starting point; the second one starts the trend, and the trend is the thing worth watching.
This is educational information, not financial advice. Survey figures are 2022 dollars from the most recent SCF wave and will shift when the next wave publishes.