What’s Your Net Worth and Why It Matters!

The phrase “net worth” can sound intimidating, but it is really just a snapshot of your financial life.

Your net worth is what you own minus what you owe. That’s it.

You list your assets, which might include your savings, investments, retirement accounts, and property. Then you list your liabilities, such as credit cards, student loans, car loans, and your mortgage. Subtract the two, and "voila," you have your number.

Here are a few free calculators to try:

•  My favorite is this brightly colored one from Microsoft
•  This basic one for Excel or Google Sheets
•  This site has one for America or for Canada

This number you’ll uncover is not a grade. It is not a judgment. It is simply information.

Knowing your net worth matters because it shows you the big picture. Instead of focusing on individual bills or accounts, you can see how everything fits together. It helps you understand where you truly stand and what direction you are moving in.

One of the biggest benefits of calculating your net worth is that it gives you a baseline. From this point forward, you can track progress. Even small improvements become visible. Paying down a loan. Increasing your savings. Growing your investments. These changes add up over time.

There is also something empowering about facing the full picture. Avoiding your numbers does not make them go away. But understanding them gives you options. You can make intentional decisions instead of guessing or reacting.

Your net worth is like a financial GPS. You cannot plan where you want to go if you do not know where you are starting. I promise that annually doing this one simple exercise will bring clarity, confidence, and a sense of direction to your financial life.