How do you calculate your net worth with accounts, belongings, money owed to you and debts?

Why is net worth different from your balance?

The money in your bank account is only part of the picture. Your credit card debt, a loan you gave a friend, gold kept at home or a car you plan to sell all belong in it too. Looking at your balance you may feel fine, but if your card debt is larger than your balance, your net worth is negative.

Following net worth as one figure shows whether you are moving forward month by month. Income and expenses describe what flowed through a month; net worth tells you what was left at the end of it.

What goes into the calculation?

Accounts: the balances of your bank, cash, savings, gold and currency accounts. Spending on a credit card account pulls its balance below zero and is subtracted from the total.

Items: things of value you own, such as a car, a phone or a bike. An item counts from its purchase date until its sale date. On the day you sell it, it leaves your net worth and the money from the sale lands in your account.

Receivables and payables: money you lent to people and borrowed from them, including unpaid daily wages. Each person's balance is added up separately per currency. If the balance is in your favour it counts as a receivable; if not, as a payable.

A worked example

Say you have 60,000 in the bank, 10 grams of gold at home and 15,000 of spending on your credit card. You entered 650,000 as the estimated value of your car, a friend owes you 5,000 and you owe someone else 20,000.

If a gram of gold is 3,000, the gold account is worth 30,000. Accounts come to 60,000 + 30,000 − 15,000 = 75,000. Add the car's 650,000 and the 5,000 receivable, subtract the 20,000 you owe, and your net worth is 710,000.

How does it look on the dashboard?

Your net worth sits at the top of the dashboard with its four parts under it: Accounts, Items, Receivables and Payables. On Pro, the Net worth · last 12 months chart shows the total on the last day of each month.

Gold and foreign currencies are converted into your main currency at the latest rate known up to that day. If a unit has no rate at all, its amounts are left out of the total and the dashboard shows a warning such as "Enter a rate for Pound sterling; it is not counted in the total right now." Tapping it opens the Rates page, where you enter the rate.

Where does an item's value come from?

When you add an item, Purchase price and Purchase date are required and Estimated current value is optional. On the dashboard, net worth uses the estimate if you entered one and the purchase price if you did not. The estimate is your own; the app does not look up second hand prices or market values. If you lower the estimate as your car loses value, your net worth stays close to reality.

Past months use the purchase price. The 12 month chart and the month end figures in the monthly report count items at what you paid, so an estimate you change today does not rewrite earlier months.

Wiozen Ledger does not track stock or crypto prices and does not calculate investment returns. Its rates cover foreign currencies and gold. You can add another unit under Currencies in Settings, but you enter its rate yourself.

Reading the monthly change

The monthly report compares your net worth on the last day of the previous month with the end of the month you picked and shows the difference as the change during this month. For the current month the comparison uses today's figure, with items at their estimated value.

When you read the change, separate out the effect of exchange rates. If the dollar or gold goes up, your net worth can rise without you saving anything. The report also shows income against expenses near the top; reading the two together tells you whether a rise came from saving or from rates.

Which plan includes this?

Pro includes items, people (money owed both ways), foreign currency and gold accounts and the monthly report. Every new account gets 14 days of Pro without a card; after that Pro is $39.99 a year or $6.99 a month. The free plan has 1 account and 30 records a month. Details are on the pricing page. On the free plan your one account is in your main currency, so net worth is simply that account's balance.