Know your net worth

Your net worth is the difference between your assets, or what you own, and your liabilities, or your debt. Examples of assets include bank accounts, investments, and real estate. Examples of liabilities include your mortgage, loans, and credit card debt. Tracking your net worth over time can offer a view of your finances and help you identify areas for improvement.

To calculate your net worth, start by making a list of your assets and your liabilities. Subtract the liabilities from the assets to arrive at your net-worth figure.

As you repay debts and accumulate additional assets, you will see your total net worth rise, indicating positive financial growth. It's common for younger individuals to have low or negative net worth when they start their careers, while older individuals further in their careers have a higher net worth.

Since each person's financial situation and goals are unique, there is no ideal net worth that applies to everyone. Instead, you should analyze your situation and determine your ideal net worth for the near-term and long-term future. 

Reviewing your assets and liabilities and knowing your net worth is helpful to develop a long-term financial plan. Having clarity on your complete financial picture allows you to make better decisions, improving your situation over time.