Net worth is the difference between what you own and what you owe, your financial snapshot in a single number. It’s a key metric for understanding personal or business financial health and tracking progress toward wealth-building goals.
💰 What Is Net Worth?
Net worth is a simple but powerful concept: it’s the total value of your assets minus your liabilities. Assets include everything you own that has monetary value like cash, property, investments, and vehicles. Liabilities are your debts such as loans, credit card balances, and mortgages.
Imagine your financial life as a walk-in closet.
You swing open the doors and see rows of designer heels, vintage jackets, and that dreamy handbag you saved up for. But tucked behind the glam are a few price tags still dangling and a credit card bill in your coat pocket.
Welcome to the world of net worth, fashion edition.
Total Assets minus Total Liabilities = Net Worth
This calculation gives you a clear picture of your financial standing at a specific point in time.
🧍 Personal Net Worth
For individuals, net worth includes:
- Assets: savings, retirement accounts, real estate, vehicles, jewelry, and other valuables
- Liabilities: student loans, credit card debt, car loans, mortgages, and other obligations
A positive net worth means your assets exceed your debts. A negative net worth means you owe more than you own which is a signal to reassess spending, saving, and debt management.
👜 Assets: The Pieces You Own
Assets are like the items in your closet that you actually own. Think:
- Your favorite trench coat (paid in full)
- A vintage Chanel bag (resale value = high)
- Jewellery passed down from your gran
- Cash in your wallet (or that emergency stash)
- The market value of your primary residence and any other real estate you own. If you bought your home a long time ago, the original purchase price may be too outdated. Determine the current market value of your home.
- The value of your car or other vehicles
- The amount you have in investments, such as retirement accounts, real estate, stock in companies, bonds, etc. Your RA counts here too!
- The amount you have in your cheque and savings accounts, cash, etc.
- The value of your jewellery and other collectibles.
- The cash value of your life insurance is considered an asset.
- Any other personal property you have should be added together here.
In finance, assets include things like savings, property, investments, and even your car. In fashion terms, it’s the stuff you could resell, reuse, or rely on.
💳 Liabilities: The Price Tags You Haven’t Paid Off
Now peek at the receipts:
- That designer dress you bought on credit
- A store card balance from last season’s splurge
- A loan you took that you still owe the bank for
- Home loan
- Car loan
- Credit card balances
- Student loan debt
- Medical debt
- Personal loan
- Other financial obligations
These are your liabilities or the debts that still need to be paid. They subtract from your financial closet’s total value.
🏢 Business Net Worth
In business, net worth is often called shareholders’ equity or book value. It reflects the company’s total assets minus its total liabilities. This figure helps investors and stakeholders assess the company’s financial health and long-term viability.
📉 Can Net Worth Be Negative?
Yes. If your liabilities outweigh your assets, your net worth is negative. This is common for students with large loans or new entrepreneurs with startup debt. The key is to monitor and improve it over time through saving, investing, and debt reduction.
Why you should know your Net Worth
- Tracks financial progress: It shows whether you’re building wealth or accumulating debt.
- Guides decision-making: Helps with budgeting, investing, and setting financial goals.
- Supports financial planning: Essential for retirement planning, loan applications, and estate management.
✨ Net Worth: Your Style Score
🧮 How to Calculate Your Net Worth
Step 1: List all assets and estimate their current value.
Step 2: List all liabilities and total your debts.
Step 3: Subtract liabilities from assets.
So what’s your net worth?
It’s the value of everything in your closet (assets) minus what you still owe (liabilities). If your wardrobe is worth R50,000 but you owe R20,000 in fashion debt, your net worth is R30,000.
Remember: Total Assets minus Total Liabilities = Net Worth
You can use spreadsheets, budgeting apps, or financial tools to update this regularly. Some banking apps even calculate this for you automatically, based on the balances and information it is able to retrieve with your ID number.
If you owe more than your closet’s worth, your net worth is negative, like realizing your wardrobe is mostly a rented runway.
Net worth isn’t just for the wealthy, it’s a universal tool for financial clarity. Whether you’re just starting out or managing a business, tracking your net worth helps you stay grounded, set goals, and make informed decisions.
🧵 Why It Matters (Even If You’re Not a Fashionista)
📈 Why you should know your Net Worth
- Tracks financial progress: It shows whether you’re building wealth or accumulating debt.
- Guides decision-making: Helps with budgeting, investing, and setting financial goals.
- Supports financial planning: Essential for retirement planning, loan applications, and estate management.
- It’s empowering: Tracking net worth is like curating a wardrobe that reflects your values instead of trends.
Knowing your net worth as a young South African professional woman is like checking the label before buying a designer dress. It tells you what you’re really working with. Whether you’re building your career in heels or sneakers, understanding the value of what you own versus what you owe helps you make empowered financial choices. Think of your net worth as your personal style score: your paid-off car, savings, and investments are your timeless staples, while credit card debt (that whole new wardrobe) and student loans are the impulse buys you’re still paying off. Tracking it regularly means you’re not just dressing for success. You’re designing a life that fits your goals, your budget, and your future.
💡 How to Improve Your Net Worth (Without Sacrificing Style)
Boosting your net worth isn’t about cutting out cappuccinos or skipping sales. Make smart, sustainable moves that align with your goals. Think of it like curating your wardrobe: you want timeless pieces, not just trendy splurges.
👠 1. Pay Down Debt Like You’d Retire Fast Fashion
Start with high-interest debt (like credit cards). Every payment reduces your liabilities just like clearing out impulse buys makes space for investment pieces.
💼 2. Invest in Assets That Appreciate
Savings accounts, retirement funds, and property are your financial equivalents of a classic trench coat, they hold value and elevate your future. Even a small monthly contribution builds wealth over time.
🧾 3. Track Your Spending Like You’d Track Your Style
Use budgeting apps or spreadsheets to monitor where your money goes. If your R500 is going to subscriptions you don’t use, that’s like hoarding shoes that don’t fit.
💎 4. Monetize Your Skills
Whether it’s freelance design, tutoring, or selling curated thrift finds, your talents are assets. Turn your side hustle into a signature look for your bank account.
🧘♀️ 5. Protect Your Peace (and Your Purse)
Avoid lifestyle inflation: just because you earn more doesn’t mean you need to spend more. Choose purchases that reflect your values and savings goals.
Ready to style your financial glow-up? Download this cozy checklist and track your net worth like a stylist.
💼✨ Style Your Net Worth Today!
Download the free checklist and start tracking your assets and liabilities like a fashion pro. Whether you’re rocking heels or spreadsheets, this tool helps you build wealth with intention and flair.
👉 Pin it, print it, or add it to your resource toolkit, your financial glow-up starts here.
Net worth isn’t about being rich, it’s about being aware. Whether you’re rocking thrifted gems or luxury labels, knowing what you own vs. what you owe is the first step to financial confidence.
So the next time you organize your closet, ask yourself: What’s my financial outfit saying about me?
