What Net Worth Means
Net worth is the difference between everything you own and everything you owe. It shows your financial position at a specific point in time.
How to Calculate Net Worth with a House
Start by listing all your assets, including cash, investments, and your home. Then subtract all liabilities, such as mortgages, loans, and credit card balances. Your house counts as an asset at its current market value, not what you originally paid. If you still owe a mortgage, that balance is a liability.
Why Tracking Net Worth Matters
Tracking net worth helps you see whether your finances are improving over time. A growing net worth usually means you are building equity and reducing debt. For more details on how assets are valued, you can refer to the Consumer Financial Protection Bureau guide on understanding your net worth.
