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Key Takeaways
- To measure net worth, you subtract the total of how much you owe from the total of how much you own.
- As of 2022, the average net worth in the United States was $1,063,700, an increase of 23% from just three years earlier, according to the Federal Reserve.
- Checking net worth once every quarter is a good way of monitoring your finances.
Your net worth can say a lot about your financial life. It is easy to calculate and is a quick way to compare yourself to others at your income level. Just what is net worth?
“Net worth is a key measure of financial health. It’s the difference between what you own and what you owe. It reflects not just how much money you make but how well you manage, save, and invest your resources,” says Inna Rivilis, the founder of and a certified financial planner at Sunflower Financial Planning.
How Do You Calculate Net Worth?
To calculate your net worth, you’ll need to make a list of your assets and liabilities.
“Calculating net worth is straightforward: List all your assets—such as savings, investments, retirement accounts, and real estate—and subtract all your liabilities, including mortgages, car loans, and credit card debt. The result offers a clear snapshot of where you stand financially,” Rivilis says.
How Does Your Net Worth Compare to Others?
According to the Pew Research Center, in 2021 (the most recent data available), upper-income households had a median net worth of $803,400, middle-income households had a median net worth of $204,100, and lower-income households had a median net worth of $24,500.
According to the Federal Reserve, the average net worth in the United States was $1,063,700 as of 2022, an increase of 23% from just three years earlier. (The Fed conducts its survey every three years; its 2025 survey is due in 2026). The median net worth rose 37% to reach $192,200 in that same year.
The most common locations where Americans held assets were transaction accounts such as checking accounts (98.6%), vehicles (86.6%), their primary residence (66.1%), and retirement accounts (54.3% ) in 2022.
| 2022 Average and Median Net Worth For Different Income Levels | ||
|---|---|---|
| Income Percentile | Average Net Worth | Median Net Worth |
| Less Than 20% | $129,700 | $14,000 |
| 20% to 39.9% | $218,700 | $71,000 |
| 40% to 59.9% | $385,400 | $159,300 |
| 50% – 79.9% | $636,800 | $307,200 |
| 80% – 89.9% | $1,264,700 | $747,000 |
| 90% – 100% | $6,629,600 | $2,556,200 |
How does your net worth compare for your income level? If it is lower than you would like, there are things you can do to improve it.
“Improving net worth comes down to two core principles: increasing your assets and reducing your liabilities. Save regularly, invest for long-term growth, and focus on paying off debt efficiently. Avoiding unnecessary expenses frees up more money to grow your savings and investments,” Rivilis says.
Why Is Net Worth an Important Measure of Your Finances?
Measuring your net worth is a great way to track how well you are doing financially.
“Net worth serves as a financial progress report. Even if your income changes from year to year, a growing net worth indicates you’re building financial security,” Rivilis says. “Tracking it helps you see if your spending, saving, and investment habits are aligned with your long-term goals.”
How Often Should You Check Net Worth?
Plan on calculating your net worth four times each year to see if you are on track with your financial goals.
“Reviewing your net worth every quarter is a good balance. It allows you to track progress without stressing over short-term market fluctuations. If you’re working toward specific financial goals, more frequent check-ins can help you stay motivated and on track,” Rivilis says.
The Bottom Line
Your net worth is a useful measure of your financial life. Taking stock of your net worth every three months will help you see how well you achieve your financial goals.
To improve your net worth, bolster your assets, and pay down debts. You’ll have a stronger financial picture in no time.
