Definition
Everything you own minus everything you owe: the single best summary of financial position. Direction matters more than level; track it monthly or quarterly.
Why it matters
Net worth is the one number that cannot be gamed by a big salary or hidden by a nice car: it is the scoreboard of everything. Tracking its direction turns vague money anxiety into a measurable trend.
Example
A household owns $180,000 of assets and owes $95,000, for a net worth of $85,000. A year of debt payoff and investing later it reads $112,000; the +$27,000 trend matters more than either snapshot.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.