How to calculate your net worth in 10 minutes

Net worth sounds like a term for rich people. It is not. It is one subtraction, and it answers the question your bank balance keeps dodging: if everything was settled today, what would actually be yours? We wrote about why this one number matters before. This is the practical part: how to work it out, in about ten minutes, without a spreadsheet degree.

The formula is the whole theory:

Net worth = what you own, minus what you owe.

Everything below is just being honest about those two lists.

Step 1: list what you own

Grab your phone and write down, with today's actual figures:

• Cash, everywhere it lives. Bank accounts, mobile money wallets, the physical cash at home. Not what is usually there, what is there right now.
• Savings you have set aside. The emergency fund, the money saved toward rent or a laptop, susu or ajo contributions you can still claim. Saved money is still your money.
• Investments at today's value. Treasury bills at face value if you are holding to maturity, shares and funds at their current price, crypto at what it trades at today, not what you paid.
• Money people owe you. The 500 your cousin borrowed in March counts, if it is genuinely coming back. Money you have quietly written off in your heart should be written off on the list too.

What about your car, your phone, your land? Simple rule: count something only if you would actually sell it and it would actually fetch that price. Land with real resale value counts. The phone you would never sell and the car losing value every year mostly add noise. When in doubt, leave it out; a smaller honest number beats a bigger flattering one.

Step 2: list what you owe

This is the list people skip, which is why so many net worths are fiction:

• Bank loans and salary advances, at the balance left, not the amount you took.
• Loan app balances. Every single one, including the small ones.
• Money borrowed from friends and family. It does not stop being a debt because there is no paperwork.
• Anything bought on credit you are still paying off, and bills already overdue.

Step 3: subtract

Add up list one. Add up list two. Subtract. Say you have 4,200 across bank and mobile money, 3,000 saved toward goals, 2,500 in T-bills, and a friend owes you 800: that is 10,500 owned. You owe a 2,000 loan app balance and 1,500 borrowed from a brother: 3,500 owed. Net worth: 7,000. Works exactly the same in cedis, naira, or shillings.

Two things surprise almost everyone the first time. People with tidy salaries discover the number is smaller than they assumed, because debts they never total up were quietly eating it. And people who feel broke discover it is bigger, because savings, T-bills and money they lent out never show up in the bank balance they stare at all day.

The mistakes that bend the number

• Counting income. Your salary is not net worth, it is a flow. Only what remains, owned, counts.
• Forgetting money you lent. It is an asset. Track it, or it becomes a gift you never agreed to give.
• Ignoring small debts. Three loan apps at 400 each is 1,200 of real negative net worth.
• Valuing things at what you paid. Yesterday's price is a memory. Use today's.

The habit that matters

One calculation tells you where you stand. The habit tells you where you are heading, and the direction matters far more than the level. So pick a day, the 1st of the month works, and recalculate monthly. Ten minutes, same lists, new figures. A net worth moving up on a modest income beats a big salary with nothing sticking, every time.

If you track your money in Wealthpadi, this number maintains itself: your cash, goals, investments, the money you lent out and the debts you owe are already there, so your net worth is computed live and moving into savings never makes you look poorer. But app or no app, do the subtraction this week. You cannot grow a number you have never looked at.

Put this into practice

Wealthpadi turns habits like these into something automatic. Track your money, set goals, and watch your net worth grow. Free to start.