How to Calculate Your Net Worth (and Why It Matters)
Net worth is the single most useful number in personal finance. It's your financial scoreboard — and unlike income, it tells you how much progress you're actually making. Here's how to calculate yours and what to do with the number.
What Is Net Worth?
Net Worth = Total Assets − Total Liabilities
It's that simple. Add up everything you own, subtract everything you owe, and the result is your net worth. It can be positive or negative — many people start negative (student debt, car loans) and that's perfectly normal.
What Counts as an Asset?
- Cash and savings — chequing accounts, savings accounts, GICs
- Investment accounts — RRSP, TFSA, non-registered accounts, pension value
- Real estate — current market value of your home(s), minus nothing (the mortgage goes in liabilities)
- Vehicles — market value, not what you paid
- Business interests — your share of a business you own
- Other valuables — jewellery, collectibles, life insurance cash value
Be realistic about values. A car worth $12,000 goes in at $12,000 — not $20,000 because that's what you paid two years ago.
What Counts as a Liability?
- Mortgage balance — what you still owe (not the home value)
- Car loans — remaining loan balance
- Student loans — government and private
- Credit card debt — current balances
- Lines of credit — home equity line of credit (HELOC), personal LOC
- Any other debt — personal loans, unpaid taxes, etc.
What's a Good Net Worth in Canada?
| Age Group | Median Net Worth (Canada) |
|---|---|
| Under 35 | ~$48,000 |
| 35–44 | ~$234,000 |
| 45–54 | ~$521,000 |
| 55–64 | ~$698,000 |
| 65+ | ~$543,000 |
These are median figures (half above, half below) from Statistics Canada. Don't compare yourself too harshly — cost of living, income, and starting conditions vary enormously across Canada.
How to Use Net Worth as a Progress Tracker
Calculate your net worth today and record it. Set a reminder to recalculate every six months. Over time, the trend matters more than the absolute number. Consistently growing net worth — even slowly — means your financial decisions are working.
Breaking it down by category (investment assets vs. real estate vs. debt reduction) helps you understand what's driving growth and where to focus.
Frequently Asked Questions
Should I include my RRSP in net worth?
Yes — your RRSP balance is an asset. Just keep in mind that when you withdraw it in retirement, you'll owe income tax on the amount. Some people calculate both a gross net worth (including RRSP) and an after-tax net worth.
Is home equity part of net worth?
Yes. If your home is worth $600,000 and you owe $350,000 on the mortgage, your home equity is $250,000, which counts in net worth.
Can net worth be negative?
Absolutely. Many young Canadians start with negative net worth due to student loans. Negative net worth isn't a crisis — it's a starting point. What matters is the trend.
Should I include my car in net worth?
Yes, at current market value. Cars depreciate rapidly, so your auto asset will shrink over time — but it's still an asset today.