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Finding your net worth

Calculating your net worth is fairly simple: Add up your assets from bank accounts, retirement accounts and investments as well as your house, vehicles and other property, then subtract your debts and liabilities. What’s left? That’s your net worth.

Understanding that asset total is important because it gives you a clear picture of your financial situation, helping you identify areas where you can improve your finances, like paying down debt or saving more money.

Additionally, knowing your net worth can be a helpful tool for planning for the future, like retirement or buying a house.

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How do you stack up?

Before searching for your place in the wealth spectrum, it’s important to understand the difference between average worth and median worth. Keep in mind that the average will usually be higher, since that figure is heavily impacted by wealthy outliers whose totals raise the average even if most people in the group have considerably smaller sums.

Average net worth by age

Every three years the Federal Reserve outlines family net worth average and medians by age group. Here’s the latest data, released in October 2023.

  • 35 and under: average of $183,500 and median of $39,000
  • 35 to 44: average of $549,600 and median of $135,600
  • 45 to 54: average of $975,800 and median of $247,200
  • 55 to 64: average of $1,566,900 and median of $364,500
  • 65 to 74: average of $1,794,600 and median of $409,900
  • 75 and older: average of $1,624,100 and median of $355,600

Overall, the average net worth for all families increased by 23%; meanwhile, the median net worth for all families increased by 37 over the same period.

If those numbers leave you feeling a bit behind, don’t worry — you’re not alone. Millions of people struggle to save money and build wealth. But there are simple and important steps you can take to get back on track and boost your net worth.

Reduce debt, and start living below your means. If you're spending more than you earn, you'll never be able to save money or build wealth. So start by focusing on trimming and erasing debt and cutting back on your expenses. There are many ways to do this, like cooking at home more often, canceling unnecessary subscriptions, and shopping around for better deals on insurance and other services.

Make a budget and stick to it. A budget will help you track your spending and make sure you're not overspending. There are many different budgeting methods out there, so find one that works for you and stick with it. Consider starting here.

Start saving in earnest. Consider putting away a designated percentage of your monthly income in a high-yield savings account, a certificate of deposit (CD), or an investment account. Take advantage of retirement accounts like 401(k)s or IRAs, which offer tax advantages and potential employer matching. Automate your savings by setting up regular contributions, even if they’re small. The power of compound interest can work wonders over time, so the earlier you start, the better.

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Chris Clark Freelance Contributor

Chris Clark is freelance contributor with MoneyWise, based in Kansas City, Mo. He has written for numerous publications and spent 18 years as a reporter and editor with The Associated Press.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.