What Is Net Worth and How Do You Calculate Yours?

Most people in their early 20s have no idea what their net worth is - and honestly, that’s fine. It’s not something anyone teaches you. But at some point you start hearing the term, wondering whether yours is embarrassingly low, and not really knowing how to calculate it or what to do with the number. Here’s the short answer: net worth is the most honest financial snapshot you have. It’s not about how much you earn or how expensive your stuff looks. It’s assets minus liabilities - what you own minus what you owe. For a 23-year-old in Canada with student debt, a car loan, and $2,000 in a TFSA, the number might be negative. That’s not shameful. Negative net worth is extremely common for people your age, and knowing your real number is the first step to changing it. This guide walks you through exactly how to calculate yours, what counts and what doesn’t, and how to use it as a measuring stick going forward.

The Formula: Assets Minus Liabilities

Net worth has one formula: Net Worth = Total Assets − Total Liabilities

Your assets are everything you own that has monetary value. Your liabilities are every debt you owe. Subtract one from the other and you have your net worth. If the result is positive, you own more than you owe. If it’s negative, you owe more than you own. Neither number defines you - it just tells you where you stand today.

What Counts as an Asset

Assets fall into two categories: liquid assets (easy to convert to cash) and non-liquid assets (harder to sell quickly).

Liquid assets include:

• Cash in your chequing and savings accounts
• Money in your TFSA, RRSP, or FHSA (yes, these count - include the current market value)
• Wealthsimple or Questrade investment accounts
• EQ Bank savings balances

Non-liquid assets include:

• The current market value of a car you own (not what you paid - what it’s worth today)
• Real estate equity (if you own a home, what you could sell it for minus what you owe on the mortgage)
• Any business you own with real value

What you do not include: furniture, clothes, electronics, or other personal items. Even a $2,000 laptop depreciates fast and isn’t something you’d realistically sell in a financial pinch. Keep your asset list to things with genuine, stableish monetary value.

What Counts as a Liability

Liabilities are every debt with a balance owing:

• Student loans (NSLSC federal loans, provincial loans, any private loans)
• Credit card balances (the full outstanding balance, not just the minimum)
• Car loans or financing
• A mortgage, if you have one (the outstanding principal, not the full original loan)
• Personal loans or lines of credit
• Buy-now-pay-later balances (yes, those count too)

Quick tip: Use your most recent statements for exact numbers. Credit card balances change daily, so pull the current balance directly from your bank app rather than guessing. A net worth calculation is only useful if the numbers are accurate.

A Real Canadian Example

Here’s what this looks like for a 24-year-old in Canada finishing school and starting their first job:

Assets:

• Chequing account: $800
• TFSA (invested in ETFs via Wealthsimple): $3,400
• Car (2019 Honda Civic, current market value): $14,000
• Total assets: $18,200

Liabilities:

• NSLSC student loan balance: $22,000
• Car loan remaining: $8,500
• Credit card balance: $650
• Total liabilities: $31,150

Net worth: $18,200 − $31,150 = −$12,950

Negative $12,950. That sounds rough - but it’s completely normal for someone who just graduated and has student debt. The useful part isn’t the number itself. It’s that now you know exactly what you’re working with, and you can track whether it’s getting better or worse over time.

How to Use Your Net Worth as a Progress Tracker

Calculate your net worth once, then recalculate it every three to six months. The actual dollar figure matters less than the direction of travel. Is it going from −$13,000 to −$11,000? That’s real progress - you paid down debt faster than any new liabilities appeared. Did it drop? That’s a signal: maybe you took on new debt, your investments dropped in value, or your spending outpaced your income.

A few things that move net worth up in Canada:

• Paying down your NSLSC student loan (reduces liabilities directly)
• Adding to your TFSA or RRSP and watching investments grow (increases assets)
• Making extra payments on a car loan or line of credit
• Growing your emergency fund (cash is an asset)

For most people under 30, improving net worth is less about earning more and more about stopping the liabilities from growing faster than the assets. That means not adding new debt casually, and consistently directing even small amounts toward savings and debt repayment.

Frequently Asked Questions

Is a negative net worth normal for Canadians in their 20s?

Yes, it’s very common. Many people in their early to mid-20s have student loans, car loans, or credit card debt that outweighs their savings and assets. A negative net worth doesn’t mean you’re in trouble - it means you’re at the starting line. The goal is to track the number over time and make sure it trends upward.

Do I include my TFSA and RRSP when calculating net worth?

Yes. The current market value of your TFSA, RRSP, and FHSA accounts all count as assets. Include the actual balance at the time of calculation, not your contribution total. If your TFSA holds ETFs that have grown to $5,200, include $5,200 - not the $4,500 you contributed.

Should I include my car in my net worth calculation?

Yes, at its current market value - not what you originally paid for it. Cars depreciate quickly, so a car you bought for $18,000 two years ago might be worth $13,000 today. Use resources like Canadian Black Book or Kijiji listings for comparable vehicles to get a realistic estimate. Also include any remaining car loan balance on the liabilities side.

How often should I calculate my net worth?

Once every three to six months is a reasonable cadence. Calculating too frequently (weekly) creates noise because investment values fluctuate day to day. Quarterly or semi-annual checks give you enough time for real changes to show up, while keeping you engaged with your financial progress. Many people do it at the start of the year and at mid-year.

What is considered a good net worth at 25 in Canada?

There’s no single benchmark, and comparisons to averages can be misleading. At 25, having a net worth close to zero or slightly positive puts you ahead of many peers who carry significant student or consumer debt. A more useful question is whether your net worth is improving - even by a few hundred dollars a quarter. Consistent upward movement over several years compounds into real financial security.

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