Net Worth

Net worth is the amount by which your assets exceed your liabilities.  It is a concept that can be applied to individuals and can serve as a benchmark for measuring your financial health.  It can also help in your retirement planning as your future net worth will fund your retirement lifestyle.

You have looked at your income and expenses on the Budget basics page, now it’s time to work on your own personal balance sheet to see where you stand.  If you owe more than you own then you have a negative net worth and you may need to consider your position.

This page is designed to provide you with an overview on each of the topics to get you thinking along the right lines and also provide you with links to a range of other resources and tools. 

Read through the explanations and then come back to the resource links to access some excellent calculators to help you capture all of this information.


Assets are what you own.  Broadly speaking, they can be divided into three categories:

Current assets

Things that you own that can easily be turned into cash without losing a lot of value.  For most of us that means savings accounts, term deposits, and cash.  Arguably, shares could be included here if you considered that you might be selling them in less than twelve months.  Other assets could be money owed to you such as a tax refund or a loan to another person.

Non-current assets

These include the house that you live in, cars, boats, artwork and furniture. Some would argue that cars and boats aren’t assets at all but are really liabilities (Robert Kiyosaki in Rich Dad, Poor Dad argues this point effectively). However, for the purposes of this exercise include them in the asset section.  The key is to value them at market value, that is, what you could sell them for tomorrow.

Investments & income producing assets

This category includes shares, managed funds, long term loans to others, bonds, superannuation and investment property. Make sure you value them at current market prices.


Liabilities are what you owe.  They include current bills, loans on cars and property, credit card balances and any other debts you have.  Liabilities can be broken up into:

  • Current - due within 12 months
  • Non Current - due in more than 12 months

How do I calculate my net worth?

To calculate your net worth, visit one of the highly recommended sites below. We suggest you work through the calculator and create your own personal balance sheet. Make sure you print it out for your records and then come back here to learn more about analysing and keeping track of your net worth.

The MoneySmart Net Worth calculator is an excellent tool that asks you to record your assets and liabilities and even gives you some insight into your financial strength.

The Dinkytown Net Worth calculator is fairly sophisticated and even provides you with a graph to project your future net worth.

 Analysing your personal balance sheet

Now that you have captured your net worth what is the next step?  Consider some of the following questions:

The answers to all these questions should be considered when you start to think about setting your investment goals.

  • Are your liabilities more than your assets?
  • How can you decrease your liabilities?
  • What strategies can you implement to increase your assets?
  • If you increase your assets will your liabilities increase by the same amount?
  • What is your ideal retirement net worth 

 Keeping track of your net worth

You have calculated your net worth, analysed your personal balance sheet and you plan to write some short term and long term financial goals to help you increase your net worth.  Imagine that it is now twelve months later and you want to see what financial progress you are making.

A simple spreadsheet is all you need to use.  Try our net worth tracker which captures assets and liabilities on a year to year basis and provides you with a simple graph. Modify this spreadsheet to suit yourself.  You may want to keep track of your net worth monthly or quarterly. 

Being able to see clearly that you are on track and that your net worth is increasing on a regular basis can be hugely satisfying.  If you keep it updated regularly you will know your net worth at any point in time.

 Reducing debt

One way to increase your net worth is to reduce your liabilities – in other words get your debt under control.

The following are links to useful resources covering debt reduction:

11 Helpful tips for managing uncontrolled debts

Taking control of debts

Unshackle yourself and move forward