Net Worth Statement: The Complete Guide

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Net Worth Statement Guide

If you want to…

  • Calculate your net worth
  • Obtain access to a free net worth template
  • Understand the definition of a net worth statement

…Then continue reading my complete guide on net worth statements!

the millennial money woman blog post "free net worth template"

Free Net Worth Template

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What is a Net Worth Statement?

A net worth statement gives you an idea of how much you are worth at any given point in time by subtracting whatever you owe (your debt) from what you own (your assets).

There are 3 ways your net worth could be summarized:

Net Worth What it Means
  • You are on your way to riches!
  • You own more than you owe.
  • You are starting on ground 0.
  • You want to build a positive net worth moving forward.
  • You are in debt.
  • You owe more than you own.

I want to note a point: Falling in the negative net worth category is OK. In fact, it’s pretty normal. Jumping from the negative net worth to the positive net worth is underrated, and should be celebrated in my opinion. 

So let’s figure out how to notate a net worth in an actual formula. 

Below are the terms, above, defined:

  • Assets – Something you own.
  • Liabilities – Something you owe – a debt.

I’ve always been curious to see how my net worth at my current age compares to the rest of America. 

If you’re like me, then I threw in a treat for you, below. 

Check out the median (middle) net worth by age group in America.

the millennial money woman blog post "median net worth by age in the usa"

Image: The Millennial Money Woman | Source: Federal Reserve Survey of Consumer Finances

The median American net worth sits around $97,300.

As you can see, many people struggle to build a positive net worth for themselves – really at any age. 

Especially for today’s millennials who have to deal with the stress of paying down student debt – building a positive net worth statement is not too easy and it takes time.

"The best way to jump out of a negative net worth situation is by starting - and sticking to - a budget."

So once you do cross over from a negative net worth statement to a positive net worth statement, I truly do think you should give yourself time to celebrate and enjoy this milestone

Why Would you Prepare a Net Worth Statement?

Understanding and knowing your net worth is very important.

Why would you prepare a net worth statement?

  • Where your net worth is currently
  • What you need to do to get to where you want to be
  • Could be a massive wake-up call for you to get on track

why you should prepare a net worth statement

Honestly, the question should be: Why wouldn’t you want to prepare a net worth statement?

“A net worth statement can be brutal – but necessary - wake-up call and reality check.”

Benefits of a net worth statement:

  • Helps you understand how much you owe
  • Helps you understand how much you own
  • Pinpoints areas where expenses are excessively high
  • Identifies opportunities for you to grow your net worth
  • Provides you the chance to develop a plan to pay down debt 
the millennial money woman blog post "net worth statement the 5 benefits"

Knowing where you currently are, financially speaking, can force you to be more thoughtful about how you spend your money.

That exercise is a fantastic way to feel good about yourself – especially when you see the hard work that you’ve put into paying down debt and amassing more assets.

How to Prepare a Net Worth Statement

Keep in mind that we’ll be looking into how we can prepare a personal net worth statement. 

However, business net worth statements are fairly similar in style and manner compared to a personal net worth statement.

Below are the 4 simple steps to creating an accurate net worth statement:

  • Add together your assets (what you own)
  • Add together your liabilities (what you still owe)
  • Subtract your liabilities from your assets
  • The answer to Step 3 is your net worth
how to find your net worth

Now, keep in mind that finding your net worth is based on a proven formula.

How to Calculate your Net Worth

Net worth = Assets – Liabilities

Now, what if you are not sure what an asset or liability actually is. 

Let me provide some examples, below.

Asset Example Where you can Find the Asset’s Value
Cash in bank accounts
Bank statement
Investment accounts
Monthly investment account statement
Retirement accounts (IRAs, Roth IRAs, 401(k)s, 403(b)s, etc.)
Monthly retirement account statement – if you have trouble finding this document, contact your HR representative
Home equity
Typically your home’s equity is calculated using the following formula: Equity = Current Home Market Value – Outstanding Mortgage (which is found on your monthly mortgage statement)
Similar to finding your home equity, find out how much your car is currently worth (using resources such as the Kelly Blue Book) and subtract what you owe (if anything), found on your monthly auto loan bill
Cash value in life insurance
You’ll typically find the net cash value of a life insurance policy in your monthly insurance statement
HSA assets (health savings account)
You’ll find this value in your monthly HSA statement
Art, jewelry, collectibles
Typically you would want an appraiser to help you find the current market value of these items
Accounts receivable
Anything that is still owed to you (if you own a business for example) but you have not yet received payment is also considered an asset

Now let’s take a look at some examples of liabilities (what you owe) and where you can find the information to help you determine the amount of money that you owe.

Liability Example Where you can Find the Liability’s Value
This is what you owe on your home. You’ll likely find your mortgage on your monthly statement
Credit card bills
You’ll have to download the most recent monthly credit card statement (typically found online) to see your current balance that’s owed
Auto loans
The amount you owe on a car is typically noted in your monthly auto loan bill
Student debt
Any federal, private, subsidized or unsubsidized student loan is considered a debt. You’ll find the value of this student loan on the latest monthly statement
Accounts payable
If you owe money and have not yet paid to what is typically a business, this is considered to be an “account payable.” An example of an account payable could be an unpaid medical bill
Loans of life insurance policies
If you have taken out a loan on a life insurance policy (which I do not recommend), you’ll find the information on your latest monthly life insurance statement
Unpaid income tax
If you still owe income taxes, consider this expense to be a liability. You’ll likely find this amount by calling your accountant or CPA – or you would see this information in your latest tax return

Make sure you carefully analyze your current debts so that you net worth statement is as accurate as possible.

It would be pretty bad if you try to skip over some debts or inflate what you currently own just to make your net worth statement look better.

Don’t do it. You’re going to regret that later.

Free Net Worth Statement Template

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Net Worth Statement Example

If you’ve just downloaded my free net worth statement template but aren’t quite sure on where to start – or really how to start, I’ve prepared an example net worth statement, below.

Actually, I’ve obtained the permission from one of my mentees to share her current net worth. 

[Hint: She’s super proud about her recent net worth statement accomplishment and asked me to share this to the world].

“Celebrate the small successes. They will lead you to the major victory.”

Before we take a look at her net worth, let’s check out some of her statistics, so her net worth statement numbers make more sense:

Mentee Information
Marital status
Public relations expert
Annual salary
Miami, Florida
Highest college level
Undergraduate degree
Student debt - after graduation
$97,000 (private college)
  • Pay off all debt before 35
  • Own a home before 40
  • Start a family (hopefully)
Years tracking her net worth
8 years (since 24)

Now that we’ve figured out my mentee’s basic information, let’s take a deep dive into her net worth.

the millennial money woman blog post "net worth statement example"

Although my mentee might not be a millionaire (yet) – she has worked long and hard to dig her way out of debt (at one point, she was saddled with more than $110,000 of debt).

This debt included:

  • Car debt
  • Credit card debt
  • Student loan debt

Thanks to tracking her net worth – and thanks to consistently sticking to her plan to pay down her outstanding debt balance – she achieved her goal: A positive net worth balance.

If she can do it, you can, too.

Closing Thoughts

Now you know the following:

  • How to calculate your net worth
  • The definition of a net worth statement
  • Where to find a free net worth statement template

Well, what are you waiting for?

If you haven’t tried to construct your personal net worth statement yet, do it now.

It might take you some time if you are a newbie, but trust me, going through the process of finding the documents to piece together your net worth statement is actually pretty fun (believe it or not).


Because it will help you better understand:

  • Your current financial situation
  • How much debt (if any) you are in
  • How much much you are actually worth currently
  • What you have to do in order to get where you want

What if you are nervous and don’t want to find out how much you are worth (ie – you don’t want to find out that your net worth is -$100,000 – which is actually not too unusual)?

“Ignorance is not always bliss when it comes to your net worth.”

I think if you’re nervous now to find out your true net worth number, if you wait a few more years to then determine your personal net worth statement – you’ll likely have small heart palpitations. 

Bottom Line: Don’t wait to find out your net worth. Do it now.

Your bank accounts will thank me later!

How has your net worth increased (or decreased) over the years? 

Related: Creating a Budget [Step-by-Step Guide]
Related: Unlock the Millionaire Within

Related: Formula to Building Wealth
Related: 10 Personal Finance Tips
Related: Asset Protection Plan

Fiona Smith
Fiona Smith
Fiona Smith is the founder of The Millennial Money Woman. She holds her Master of Science Degree in Personal Financial Planning, has advised decamillionaires for 6 years in the corporate wealth management sector and has co-founded a local non-profit community teaching financial literacy. She is the author of the personal finance book How to Get Rich from Nothing and her work is featured on Forbes and FinCon.

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