How to Calculate and Track Your Net Worth (And Why It Matters)

Your income is not your wealth. Your salary, your spending habits, your savings rate — these are activities, not outcomes. The outcome is your net worth: the single number that tells you exactly where you stand financially.

Understanding your net worth — and tracking it over time — is one of the most clarifying things you can do for your financial life.

What Is Net Worth?

Net worth is the difference between everything you own (your assets) and everything you owe (your liabilities):

Net Worth = Total Assets − Total Liabilities

If your assets total €120,000 and your liabilities total €45,000, your net worth is €75,000.

If your liabilities exceed your assets, your net worth is negative — which is common early in adulthood, especially with student loans or mortgages, and is not a reason for alarm. The goal is a positive trajectory over time.

Why Net Worth Matters More Than Income

Here is a common scenario: two colleagues earn the same salary. After ten years, one has a net worth of €80,000; the other has a net worth of €5,000. Same income. Completely different financial position.

The difference lies in what they did with their income: one saved and invested consistently; the other spent nearly everything. Income flows in and out. Net worth accumulates.

Tracking net worth gives you:

• A complete financial picture, not just a snapshot of this month's spending
• Long-term motivation — watching the number grow year over year is powerful
• Early warning signals — if net worth is declining despite a stable income, something in your spending or debt structure needs attention
• A measure of financial progress that budgeting alone cannot provide

What to Include in Your Net Worth Calculation

Assets — What You Own

Liquid assets (accessible quickly):

• Checking and savings accounts
• Cash
• Short-term investments (livret A, livret de développement durable, etc.)

Investment assets (longer-term):

• Brokerage accounts and stock portfolios
• Retirement accounts (PER, assurance-vie)
• Cryptocurrency (at current market value)

Physical assets (less liquid):

• Real estate (primary residence, rental properties) — use a conservative current market value estimate
• Vehicles — use current resale value, not purchase price
• Valuable personal property (jewelry, art, collectibles) — only include items you'd realistically sell

Business interests:

• Your ownership stake in a business, if it has a calculable value

Liabilities — What You Owe

• Mortgage balance outstanding
• Car loan balance
• Student loan balance
• Consumer credit and personal loans
• Credit card balances
• Any outstanding tax obligations

Be complete and honest. Every liability counts.

How to Calculate Your Net Worth: A Step-by-Step Example

Let's say you are 32 years old with the following financial picture:

Assets:

• Checking account: €3,500
• Livret A savings: €8,000
• Assurance-vie: €22,000
• Car (resale value): €9,000
• Apartment (market value): €180,000

Total assets: €222,500

Liabilities:

• Mortgage balance: €134,000
• Car loan: €6,200
• Credit card balance: €1,100

Total liabilities: €141,300

Net Worth: €222,500 − €141,300 = €81,200

This is a snapshot. Your goal is to make this number larger next month than it is today.

How Often Should You Track Net Worth?

Monthly is ideal for active financial management — it keeps you engaged and helps you spot trends quickly.

Quarterly works well if monthly feels like too much effort. Major shifts (markets, large purchases) will still be visible.

Annually is the minimum. At least once per year, take a full financial inventory.

When you first start tracking, you may see negative months — particularly if investment markets are down or you take on a new loan. This is normal. Focus on the 12-month and 3-year trends, not individual months.

What Moves Your Net Worth

Your net worth changes every month because of:

1. Income and savings: Money saved goes into assets. The more you save, the faster your net worth grows.

2. Debt repayment: Every mortgage payment, loan payment, or credit card payment reduces your liabilities. Each payment increases net worth (assuming asset value stays constant).

3. Investment returns: Money invested in stocks, bonds, or real estate generates returns. When markets rise, your investment assets grow — and net worth grows with them.

4. Asset value changes: Real estate can appreciate or depreciate. Cars always depreciate. Your net worth reflects these changes.

5. New debt: Taking on a car loan or new credit card debt immediately reduces net worth.

Common Net Worth Mistakes

Including home value at purchase price rather than market value. Use a realistic current estimate, even if it's lower than what you paid. Optimistic property valuations can make your net worth look healthier than it is.

Forgetting smaller liabilities. The €2,000 you owe a family member, the €400 outstanding tax payment — include all of it. Omitting liabilities overstates your position.

Not separating equity from gross value. If your apartment is worth €200,000 but you owe €150,000 on the mortgage, your real estate contribution to net worth is €50,000 (the equity), not €200,000.

Panicking over negative months. A bad stock market month can reduce your net worth by thousands on paper. This doesn't mean you're doing something wrong. Stay focused on the long-term trend.

Net Worth and Your Budgeting System

Every good budgeting practice you adopt — paying yourself first, using sinking funds, following the 50/30/20 rule, tracking expenses diligently — shows up in your net worth over time.

Budgeting manages monthly cash flow. Net worth measures the cumulative result of all those months.

The two work together: your budget tells you what to do this month; your net worth tells you whether your decisions over the past year are working.

Building Net Worth Faster

The fastest ways to grow net worth are not secrets:

1. Increase income — raises, side income, career growth
2. Reduce expenses — lower your burn rate using proven money-saving habits
3. Invest consistently — time in the market and compound returns are powerful
4. Eliminate high-interest debt — interest payments are a direct drain on net worth; prioritize them with the debt snowball or avalanche method
5. Avoid depreciating liabilities — financing a new car every three years is a reliable way to stay on a net worth treadmill

Track It With PatrimoinePlus

PatrimoinePlus gives you a live view of all your accounts, loans, and assets in one place — so you can see your net worth without doing manual calculations in a spreadsheet.

Add your accounts, input your loan balances and property values, and your net worth updates automatically as your financial picture changes. Set a net worth goal and watch your progress month by month.

Start tracking your net worth for free — it takes about ten minutes to set up, and the clarity you gain is immediate.

The Bottom Line

Net worth is the scoreboard of your financial life. Not your salary, not your car, not how much you spent last month. The scoreboard is: what do you own, minus what you owe?

Calculating it for the first time can be confronting — particularly if the number is lower than expected. But knowing the truth is the starting point for changing it. Every euro saved, every debt repaid, every investment made shifts the number in the right direction.

Start today. Calculate your net worth. Write it down. Check it again in three months. The trend will tell you everything you need to know about your financial direction.