Every week I explain a money-related word or phrase so that you can talk about money with confidence. Want a mini knowledge bomb in your inbox every week? Sign up here.
DEFINITION: Net worth is how much money you have (retirement savings, emergency fund) minus how much money you owe (student loans, credit card debt). If you have more money than you owe, then you have a positive net worth—congratulations! If your net worth is negative, keep repaying debt, saving, and investing—you’ll get there.
WHY IT’S GREAT: Knowing my net worth makes it easy to keep track of the big picture.
USE IT IN A SENTENCE: “I have $20,000 saved and $7,000 in loans, so my net worth is $13,000.”
Do you know your net worth? Let me know in the comments!