Aug 102015

Calculating your Net Worth

Posted on August 10, 2015 Uncategorized

Calculating your net worth is important when creating an overall savings plan. It helps you to see areas of opportunity that can easily increase your net worth such as increasing your 401K contributions or deciding whether or not a new luxury car is truly needed.

Many of us have a rough estimate of what our big-ticket items are worth and how much we owe in credit card debt. However, we commonly overlook assets and liabilities that provide us with a more accurate depiction of our net worth. When completing a comprehensive net worth calculation, each person can decide what dollar amount is significant enough to include in their figures. For example, furniture or antiques hold a certain monetary value whether it be $500 or $5000. You can decide from these figures if it is worth adding into your value calculations. You can calculate your net worth using the following formula: Assets – Liabilities = Net Worth.

Here are a list of assets and liabilities you should consider including in your net worth calculation:


  • Balance of all bank accounts
  • Value of all retirement accounts
  • Current Value of all stocks and bonds
  • Value of your home
  • Value of investment real estate you own
  • Current value of the vehicles you own
  • Value of personal items such as: antiques, jewelry, art collections, furniture, tools and machinery
  • Cash value of life insurance
  • Equity Stake in a business


  • Amount owed on your home or other real estate property
  • Auto Loans
  • Other personal loans
  • Credit Card debt
  • Student Loans
  • Amount owed on any personal items such as: furniture, electronics, machinery, or jewelry

The purpose of calculating your net worth is to help you analyze your current financial situation and help you find ways to create a plan to increase your net worth over time. Constantly managing your net worth also helps you to make conscious decisions when purchasing big-ticket items. Financial management is just as important as anything else requiring constant supervision. If you continue to manage it day-to-day and set a long-term strategy you will reach your financial goals in no time.

Contact your local Polam Federal Credit Union branch for any questions on savings or IRA accounts.