How to work out your real net worth

What to count, what to leave out, and why the number matters more than your monthly spending — with a worked example.

By António Avelar · Updated 13 August 2026 · 4 min read

Net worth is everything you own minus everything you owe. One number, and the only one that captures whether a year actually went well.

Monthly spending tells you about a month. Net worth tells you about a direction — and direction is what people mean when they ask whether they’re doing okay.

What counts as an asset

Cash and deposits. Current accounts, savings accounts, term deposits. Whatever the balance is today.

Government savings. In Portugal, Certificados de Aforro and Certificados do Tesouro. Easy to leave out because they’re not in a banking app and the accrued interest isn’t obvious — worth connecting properly rather than estimating.

Investments. Funds, shares, ETFs, pension plans you can actually access. Use current market value.

Property. What you’d realistically sell for, not what you paid and not the optimistic number. A recent sale of a comparable flat in your building is the best evidence available to you.

Vehicles. Current market value, which is lower than you think and falls every year.

Money owed to you. Only if you genuinely expect it back.

What counts as a liability

Mortgage. Outstanding balance today, not the original amount.

Loans. Car, personal, student, anything with a repayment schedule.

Credit card balances. What’s outstanding, including anything on an instalment plan.

Tax owed but not yet paid. Self-employed people, particularly — money in the account that belongs to the tax office is not yours, and treating it as an asset produces a number that is wrong in the most dangerous direction.

What to leave out

Your salary. Income isn’t an asset; it’s the flow that changes assets.

Possessions. Furniture, electronics, clothes. In principle they have resale value; in practice you’ll never sell them, and including them inflates the number without informing any decision.

Anything you’d have to keep living somewhere to sell. Include your home if you own it, but understand that this makes your net worth largely a bet on one property. Some people prefer to track two figures — with and without the home — and both are defensible.

A worked example

Net worth: €38,250.

No property in this example, which is common enough for people renting in their thirties. Note that the car appears on both sides — €9,000 of asset against €6,800 of loan — contributing €2,200 net. That’s the honest way to see a financed purchase, and it’s why a new car usually makes net worth fall on the day you buy it.

The number that actually matters

Not the total. The change.

€38,250 in isolation says almost nothing — it depends on age, income, whether you’ve had one salary or twenty years of them. But €38,250 today against €31,000 a year ago says you added €7,250, and that’s a fact about your last twelve months that no monthly budget can tell you.

Track it monthly, judge it annually. Monthly gives you a line with enough points to see a trend; annually is the only sensible interval for deciding whether the trend is good, because a single month is dominated by whether the rent left before or after the salary arrived.

Why it moves when you didn’t expect it

Three things drive it, and only one is spending:

Saving — income minus outgoings, which is the part you control directly.

Debt repayment — every mortgage payment shifts money from one side of the ledger to the other. Your net worth rises even in a month where you saved nothing.

Valuation changes — investments and property move on their own. This is why net worth can fall in a month where you did everything right, and why judging yourself on it monthly is a mistake.

Making it a number you’ll actually keep

The reason most people don’t track net worth is that it requires assembling balances from five places, and by the time you’ve done it twice you’ve stopped.

Automating the assembly is the whole trick: connected bank accounts, connected savings certificates, and manually-entered values for property, vehicles and loans that only change when you update them. Then the figure is simply there when you want it, recorded over time, and the annual comparison exists without anyone having built it.

That’s the version people keep for years — which matters, because this is a measure that only becomes interesting once you have enough history to see the slope.