You might earn £50,000 but have a negative net worth. Or earn £25,000 and be quietly building wealth. Income is what you earn; net worth is what you keep. It's the single most important number in personal finance, and most people have never calculated it.
Calculating Your Net Worth
Net worth = everything you own minus everything you owe:
- Assets (what you own): Savings accounts, ISAs, pension value, property equity, investments, car value, valuable items
- Liabilities (what you owe): Mortgage balance, student loan, credit card debt, overdrafts, personal loans, car finance
- Net Worth = Assets - Liabilities
- Don't panic if it's negative — most young adults have negative net worth due to student loans. The important thing is the trend.
Why Track It Monthly
Tracking monthly reveals patterns that annual snapshots miss:
- You'll see which months your wealth grows and which it shrinks
- Motivation: Watching net worth climb is addictive (in a good way)
- Early warning: You'll spot problems (growing debt, depleting savings) months earlier
- Decision-making: Major purchases are easier to evaluate against your net worth trajectory
Tools for Tracking in the UK
Options for UK residents:
- Emma: Connects all UK accounts via Open Banking, auto-calculates net worth
- Money Dashboard: Similar auto-aggregation with net worth tracking
- Spreadsheet: Simple but effective. Update on the 1st of each month.
- SYM: While focused on saving challenges, your SYM savings goals contribute directly to growing your net worth
Net Worth by Age (UK)
Official figures from the ONS Wealth and Assets Survey show that typical wealth rises sharply with age, mostly because of pensions and property, and that averages are pulled up by a small number of very wealthy households. That makes age benchmarks a poor target. A better test is simple: is your net worth higher than it was a year ago?
FAQ
Should I include my student loan in net worth?
Technically yes, it's a liability. But UK student loans are so unlike normal debt (income-contingent, written off after 25 to 40 years depending on your plan) that many people exclude them for a more practical picture.
Does my car count as an asset?
Yes, at its current resale value (check AutoTrader). But don't overestimate — cars depreciate rapidly. If it's financed, also include the remaining finance as a liability.
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