Adulting 101: Financial Freedom for Gen Z & Young Millennials

Understanding Your Financial Landscape: The Brutal Truth

Calculating Your Net Worth: The Big Picture

Let’s be real. You’re probably not thinking about your “net worth” while scrolling TikTok or deciding between ramen and takeout. But ignoring the big picture won’t make your money problems magically disappear. Knowing where you actually stand financially is the first step to getting control. It's not about being rich right now; it's about knowing where you are so you can build the future you want.

Your net worth is simply what you own minus what you owe. Sounds basic, right? It is. But surprisingly few people actually calculate it. This isn’t about judgment; it’s about information. Think of it like checking your weight if you’re trying to get in shape. You need a starting point.

Why Bother with Net Worth?

Knowing your net worth gives you a clear snapshot of your financial health. It’s a baseline. Are you moving in the right direction? Are your efforts actually making a difference? It also helps you prioritize. Seeing the numbers can be a serious wake-up call, in a good way. It highlights what’s working, what’s not, and where you need to focus.

Step 1: List Your Assets (What You Own)

Assets are things that have value and can be turned into cash. Here’s a breakdown of common assets:

• Cash: Checking accounts, savings accounts, money market accounts.
• Investments: Stocks, bonds, mutual funds, ETFs, cryptocurrency (be honest with yourself about the current value!), retirement accounts (401k, IRA, Roth IRA).
• Real Estate: If you own a home, condo, or other property, list its current market value (not what you originally paid).
• Personal Property: This is trickier. Cars, jewelry, collectibles, anything you could realistically sell. Be conservative with these estimates. Don't inflate the value.
• Side Hustle Assets: If you have equipment or inventory for a side business, include its value.

Action step: Download our Net Worth Tracker template [link to downloadable template]. It's a simple spreadsheet to help you organize everything.

Step 2: List Your Liabilities (What You Owe)

Liabilities are your debts. Everything you owe to someone else.

• Student Loans: Federal and private loans. Use the current outstanding balance.
• Car Loan: The remaining amount you owe on your vehicle.
• Credit Card Debt: Total balance across all cards.
• Personal Loans: Any loans you’ve taken out for other purposes.
• Mortgage: If you own a home, the remaining balance on your mortgage.

Step 3: Calculate Your Net Worth

Now for the math. Don’t panic. It’s easy.

Net Worth = Total Assets, Total Liabilities

If the result is positive, congrats! You have more assets than debts. If it’s negative, that’s okay too. Many people starting out have negative net worth, especially with student loans. It just means you have some work to do.

Example: Meet Sarah

Let’s look at Sarah, a 24-year-old recent college grad.

Assets:

• Checking Account: $1,500
• Savings Account: $3,000
• 401k (from part-time job): $2,000
• Car (estimated value): $12,000
• Total Assets: $18,500

Liabilities:

• Student Loans: $35,000
• Car Loan: $8,000
• Credit Card Debt: $1,500
• Total Liabilities: $44,500

Sarah’s Net Worth: $18,500 - $44,500 = -$26,000

Sarah’s net worth is negative. This isn’t ideal, but it’s a realistic starting point for many young adults. The important thing is she knows this, and can start making a plan to improve it.

Using the Net Worth Tracker

Our template simplifies this process. Here’s how to use it:

1. Create a Tab for Each Category: Assets, Liabilities, and Net Worth.
2. List Each Item: In the appropriate category, list each asset and liability with its value.
3. Use Formulas: The Net Worth tab automatically calculates your net worth by subtracting total liabilities from total assets.
4. Update Regularly: Aim to update your net worth monthly or quarterly to track your progress.

Pro tip: Be consistent with your valuations. ...