When it comes to the net worth of many Americans, trouble does indeed come in threes.
A new study finds that 51% of Americans have no clue how to calculate their assets to get a true view of their money, and nearly a third believe they have a zero — or negative — net worth.
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And the kicker: One third of respondents claimed they knew the net worth of at least one celebrity — subtly suggesting that some of us may be more interested in the numbers of the rich and famous than in our own financial health.
The findings from CreditKarma’s survey are a shocking reminder about the varying degrees of attention to which Americans pay their own finances.
The study found that 61% of women say they don’t know how to calculate their net worth (61%), with roughly 4-in-10 men saying they don’t know. Among the survey’s other disturbing findings: 21% of respondents aged 59 and older — those most likely closest to their retirement years — reported having nothing.
Here’s how to find your net worth — and some simple tips to boost it if you’re not happy with the final figure.
Finding your net worth
Calculating your net worth is fairly simple: Add up your assets from bank accounts, retirement accounts and investments as well as your house, vehicles and other property, then subtract your debts and liabilities. What’s left? That’s your net worth.
Understanding that asset total is important because it gives you a clear picture of your financial situation, helping you identify areas where you can improve your finances, like paying down debt or saving more money.
Additionally, knowing your net worth can be a helpful tool for planning for the future, like retirement or buying a house.
Read more: Shopping without a cash back credit card is just losing money — here’s how to make sure you don’t miss out on serious savings
How do you stack up?
Before searching for your place in the wealth spectrum, it’s important to understand the difference between average worth and median worth. Keep in mind that the average will usually be higher, since that figure is heavily impacted by wealthy outliers whose totals raise the average even if most people in the group have considerably smaller sums.
Here’s the most recent data from the Federal Reserve, which every three years outlines net worth average and medians by age group:
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35 and under: average of $76,300 and median of $13,900
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35 to 44: average of $436,200 and median of 91,300
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45 to 54: average of $833,200 and median of $168,600
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55 to 64: average of $1,175,900 and median of $212,500
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65 to 74: average of $1,217,700 and median of $266,400
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75 and older: average of $977,600 and median of $254,800
If those numbers leave you feeling a bit behind, don’t worry — you’re not alone. Millions of people struggle to save money and build wealth. But there are simple and important steps you can take to get back on track and boost your net worth.
Reduce debt, and start living below your means. If you’re spending more than you earn, you’ll never be able to save money or build wealth. So start by focusing on trimming and erasing debt and cutting back on your expenses. There are many ways to do this, like cooking at home more often, canceling unnecessary subscriptions, and shopping around for better deals on insurance and other services.
Make a budget and stick to it. A budget will help you track your spending and make sure you’re not overspending. There are many different budgeting methods out there, so find one that works for you and stick with it. Consider starting here.
Start saving in earnest. Consider putting away a designated percentage of your monthly income in a high-yield savings account, a certificate of deposit (CD), or an investment account. Take advantage of retirement accounts like 401(k)s or IRAs, which offer tax advantages and potential employer matching. Automate your savings by setting up regular contributions, even if they’re small. The power of compound interest can work wonders over time, so the earlier you start, the better.
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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
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