Your Net Worth Isn’t About the Number — It’s About the Direction
Understanding the meaning of your net worth — and separating self-worth vs net worth — is one of the most important steps in building long-term financial confidence. As I have conversations with my clients to understand if they have ever looked at their net worth many people seemed bashful to share, they had never calculated it yet. Perhaps they also felt I might be judgmental because the number is low? Another consideration is individuals could feel intimidated about the figure because it is not as high as social media or society dictates it should be. It is my opinion that knowing your net worth is just to have more information to put in your pocket, not your identity. Your net worth is not about where you are - it is about where you are headed.
A net worth calculator is a tangible item for tracking your financial position at a specific time, reflecting your overall wealth by subtracting debts like mortgages, loans, and credit card balances from your possessions like cash, investments, real estate, and valuable personal property.
Why Knowing Your Net Worth Matters for Financial Confidence
Net worth is calculated by subtracting your total liabilities from your total assets and is commonly used as a financial planning tool — not a measure of personal success or value. But what does net worth mean? Let’s get more detailed, your net worth measures everything you own (assets) minus everything you owe (liabilities).
Why do I think knowing your net worth can be useful? Having this data is good for tracking your progress, growth opportunities, planning for the future and perhaps decision making. Your net worth cannot measure your self-worth, your efforts, emotional toil towards achievements, resilience or any transitions you have experienced. I believe that your net worth is only a tool, a snapshot in time - not a scorecard.
Knowing your number matters because it can help you build momentum and support your long-term planning and financial confidence. It can be a good way to track your progress over time and may provide you with an opportunity to identify improvements. When you can work with your money, get clarity around your progress and build awareness of your trends and plans, you are in a much better place to understand your financial position. Dare I say, start to fall in love with your financial picture?
To calculate your net worth, start by listing out all of your assets (typically cash, savings accounts, investments, home equity and retirement accounts). Then list out all of your liabilities (usually debts like your outstanding mortgage, credit card balances, student loans and auto loans). Remember this can be estimated, it does not need to be perfect down to the exact penny.
How Often Should You Update Your Net Worth for Long-Term Planning?
You will want to be consistent when looking at this data, this allows you to see trends that take place around the same time each year. I personally look to calculate my net worth twice a year which corresponds when I meet with my financial planner, but at a minimum I would suggest annually. Or if you happen to be paying down debt you might want to look at this more often as a way to view your progress but remember this is about monitoring your trends - this should not be a daily metric you track.
Using your net worth as a directional roadmap for financial planning could be beneficial as it will highlight where your growth is happening. Or perhaps reveal areas that might be misaligned, for example you could notice that your student loan debt is not going down quickly enough. Many student loans have low APRs and if you are not making extra principal payments then those balances may seem to be stretched out unless you jump start them. Checking your net worth progress can also help you prioritize your goals or next steps - going back to my student loan comment, perhaps you want to reduce that debt quicker, or maybe invest more in your 401k or save towards a house. Without monitoring your net worth annually, it could be hard to really land on seeing the growth you planned for.
Separating Self-Worth vs Net Worth
The whirlwind of life can really affect our finances, this is why I think at a minimum you should view your net worth once a year. My hope is that by looking at it once you will not focus too much on the data but instead just track minimal changes. These numbers reflect the circumstances of your financial story - but it is not the whole story of your life.
I want you to separate net worth from self-worth because it will improve your awareness of the importance of your own self-worth and how you want to continue as a human being. Knowing your self-worth creates emotional stability while your net worth can vary. Finances change, stock markets vary and job situations fluctuate, so if your sense of worth is tied only to your assets, then your confidence rises and dips with every financial change. You don’t want that! So instead, having a strong self-worth gives you a steady foundation regardless of what your account balances look like. Your self-worth at the core is your character - let it guide you daily and your net worth is just one check point you assess yearly.
If you have been focusing too much on your net worth number, here is a money mindset shift I want you to consider. Below are some prompts to guide you towards a new perspective, ask yourself:
What is my current net worth telling me about my direction?
Where do I want it to move next - and why?
What is one small step I can take this year?
Remember your progress compounds over time, only compare your progress against your own data. Your net worth is a planning companion, not a judge or dictator.
If you are interested in learning how to calculate your net worth, click here.
In closing, a perspective from one of my favorite authors Suze Orman: “When you stop fearing the number, you gain the power to change the direction.”
I hope this has been helpful to demystify your net worth and why it is important to perform annual net worth tracking. If you’d like help calculating your net worth, strengthening your financial confidence, or using your net worth as a long-term planning tool, let’s chat. We can meet to strategize to move you from uncertainty to full financial power, it all begins when you schedule a FREE 45-minute clarity call.
You may also find my earlier blog about setting SMART Goals useful, click here to read: Before You Set Your 2026 Money Goals, Do This One Thing First…
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