In short, your net worth is based off of your assets and liabilities. Your assets are your positive and your liabilities are your negative, so you take your liabilities and subtract that from your assets. The result will be your net worth.
Now, how the hell do we figure out what is what? Me, of course!
Basically everything you own is an asset. All the money in your bank account, your home, your car, your belongings, etc. They are all your assets. Your liabilities are anything owe. Your credit card bills, medical bills, school loans, mortgage, etc. are all liabilities.
Now that you have a basic understanding of what is what, let’s get your number.
Lets say you owe $10,000 to your credit card. You’re salaried at $50,000 a year. All of your furniture are from Rent A Center, you rent your house and own your $2,000 car. This puts your net worth at $42,000 because your assets are valued at $52,000 and your liabilities are valued at $10,000. Remember, your net worth is your liabilities minus your assets.
Don’t be afraid if your number is in the negatives. This is very common when you owe money.
Keep in mind that this is a rough estimate. You may own things that have value(sorry, sentimental value does not count). To save you time only concentrate on the things that you wouldn’t be embarrassed to have a professional appraiser come and look at. This means ignore the clothes in your attic and focus on the artwork up there.
So now that you know how to figure out your net worth you can make this a semi-annual routine. It is not necessary to make this calculation often but it is good to know where you stand financially.