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Understanding your net worth is more than just crunching numbers—it can be a vital tool for gauging your financial health and aligning your priorities. In this episode of The Stewardology Podcast, we’ll break down the steps to calculate your net worth, discuss why it matters (and when it doesn’t), and explore how to approach it from a biblical perspective. Whether your net worth is positive or negative, we’ll offer insights on how to steward your resources wisely without letting money define your identity. Let’s dive in!

Net Worth: Does it Matter, and How do I Calculate it?

 

Steps to Calculate Net Worth:

Net worth is calculated by subtracting your total liabilities (debts) from your total assets. Here’s the formula:

 

Net Worth = Total Assets – Total Liabilities

1. List Your Assets

  • Include everything you own that has monetary value, such as:
    • Cash (savings accounts, checking accounts)
    • Investments (stocks, bonds, mutual funds, retirement accounts)
    • Real estate (current market value of your home or other properties)
    • Personal property (vehicles, jewelry, collectibles)
    • Business interests
  • Total these amounts.

2. List Your Liabilities

  • Include all debts and obligations, such as:
    • Mortgage balances
    • Credit card debt
    • Student loans
    • Car loans
    • Personal loans
    • Any other outstanding liabilities
  • Total these amounts.

3. Subtract Liabilities from Assets

  • Take the total value of your assets and subtract the total value of your liabilities.

Example:

  • Assets:
    • Home: $300,000
    • Savings: $20,000
    • Investments: $50,000
    • Car: $10,000
      Total Assets = $380,000
  • Liabilities:
    • Mortgage: $200,000
    • Credit Card Debt: $5,000
    • Student Loan: $25,000
      Total Liabilities = $230,000

Net Worth = $380,000 – $230,000 = $150,000

Your net worth in this example is $150,000.

 

Does Net Worth Matter?

On one hand, yes! Why does it matter? It matters because you need to know where you are at. Proverbs 27:23 reminds us, “Know well the condition of your flocks, and give attention to your herds.” You need to know if you are financially well. Up to a certain point, being aware of your net worth absolutely matters. You cannot improve what you are not aware of.

Should you improve your net worth? Yes! Grow your reserves so you can provide for your family in your old age, and meet the needs of others around you. Proverbs 21:20 – “Precious treasure and oil are in a wise man’s dwelling, but a foolish man devours it.” It is a sign of wisdom to have reserves to provide for the needs of your family.

On the other hand, no. It ultimately doesn’t matter if your net worth is $10,000 or $10,000,000 when you stand before God in eternity. You are no better or worse a Christian based on your net worth. In fact, an over-attention to one’s net worth could be a negative indication about where you value and prioritize your money, status, and position.

If you are faithful and do what the Bible tells you to do with your money, that will often result in financial abundance (though not always). But if you focus on all of the wealth, the focus goes away from the God of the wealth and towards yourself. In the end, you could walk away from your focus on God and focus more on wealth.

How do I handle this?

I have a balance sheet that I update every month. We could go back for years and tell you our net worth. This has a negative side though. It can be easy to run to my spreadsheets when I deal with hardship instead of running to God. 

Your net worth matters in so much that you are aware of your financial picture. But don’t overvalue it. Don’t let it become your identity or source of comfort.

 

What should my Net Worth be?

This question is really impossible to answer. However, it should ideally be positive (above $0). Everyone’s financial picture, goals, and cultural norms are different. And all of these factors will change over the course of a decade. So don’t put too much weight into this. But, if while doing your calculation, you find yourself upside down, lean into it and turn the ship around. Again, pay attention, but not too much attention.

 

Stewardship Application

As we wrap up today’s episode, let’s remember this key truth: your net worth is a tool, not a definition of your value. It’s important to understand where you stand financially so you can make wise decisions, provide for your family, and be generous with what God has entrusted to you. But your identity is not found in numbers on a balance sheet.

Your worth comes from being a child of God, not from your bank account or investment portfolio. While it’s wise to grow your resources and manage them well, it’s even more important to guard your heart against placing your trust and identity in wealth. We say it often here on The Stewardology Podcast, but it’s worth repeating again – “Some trust in chariots and some in horses (or their retirement accounts and savings), but we trust in the name of the LORD our God.” (Psalm 20:7). 

So, use your net worth as a means of stewardship, not a measure of self-worth. Keep your focus on God, the giver of all things, and let Him guide you in how you manage and grow what you’ve been given. With that mindset, you can approach your finances with clarity and confidence, knowing that your ultimate treasure is found in Christ.

 

Next Steps

 

 

Material presented is property of The Stewardology Podcast, a ministry of Life Financial Group and Life Institute. You may not copy, reproduce, modify, create derivative works, or exploit any content without the expressed written permission of The Stewardology Podcast. For more information, contact us at Contact@StewardologyPodcast.com or (800) 688-5800.

The topics discussed in this podcast are for general information only and are not intended to provide specific investment advice or recommendations.  Investing and investment strategies involve risk including the potential loss of principal. Past performance is not a guarantee of future results.

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