What is Net Worth and Why Should You Track It?
Your net worth is the most accurate measure of your overall financial health. Unlike your salary, which only tells you how much money is coming in, your net worth tells you how much of that money you actually keep. It is calculated by taking the total value of everything you own (Assets) and subtracting everything you owe (Liabilities).
How to Calculate Your Net Worth
To get an accurate figure, you need to break your finances into "easy chunks." Our calculator uses four primary categories:
- Liquid Assets: Cash in bank accounts and emergency funds.
- Fixed Assets: Your home value, vehicles, and physical valuables.
- Investments: Pensions (SIPP/Workplace), ISAs, and stock portfolios.
- Liabilities: Mortgages, student loans, and high-interest credit card debt.
Joint Net Worth for Couples
For many households, wealth is built together. However, it can be helpful to see your individual "share" of the household wealth, especially for retirement planning. By toggling the **Spouse Mode**, you can identify which assets are owned jointly (like a family home) and which are individual (like a personal pension). This tool splits joint entries 50/50 to provide a clear picture of individual financial standing within a partnership.