Have you ever heard people talking about net worth and wondered what it means? Well, today, you are going to learn!    Links: Watch our Financial Freedom Webinar to learn how to strategize and build a debt payoff plan Learn how to set savings goals with Goal Builder  Check out TCU University for financial education tips and resources! Follow us on Facebook, Instagram and Twitter! Learn more about Triangle Credit Union  Transcript: Welcome to Money Tip Tuesday from the Making Money Personal podcast.  Net worth! What is it? Why is it important to track? How do you find out what your financial net worth is? All valid questions, my friends. First, let's define what net worth is.   The dictionary defines net worth as "the total wealth of an individual, company, or household, taking account of all financial assets and liabilities."    Most people will agree that the definition of net worth is simply: assets - liabilities = net worth.     Now that we know what it is, why is it essential to track it?    Well, it allows you to see your financial situation at any point and whether your wealth is increasing or decreasing. Tracking your net worth is important because it gives you a clear picture of your financial health and can help you make informed decisions about your money. Please know that it is very possible to have a negative net worth. This means that you owe more money than what your assets are worth. We'll talk a little more about this later.     Now, let's take a look at how you can figure yours out. Are you ready? Ok... take out a piece of paper and a pen or pencil. Draw a line straight down the middle.     On one side, you are going to write the word assets, and on the other, write the word liabilities.     On the assets side, make a list of valuable items that you own… think bank accounts, investment accounts like 401(k)s, any real estate property that you may own, personal property such as cars, or other items that have value. Next to these items, write down their approximate value. Here is an example of what this may look like (we'll use easy round numbers for simple math):     Bank Accounts - $5,000     Personal Home - $300,000    401(K) - $50,000    Car - $20,000    At the bottom, you will write the total for all assets. In this example, we will have a total of $375,000. Nice!    On the liabilities side of your sheet, make a list of your liabilities. Liabilities are the debts that you may owe. Next to them, write the balance so again, for easy math, in this example, we will do    Mortgage -  $210,000    Credit Card Debt - $5,000    Auto Loan - $10,000    Student Loans - $50,000      And that Home Equity Line of Credit you took out to fix up your house - $40,000    At the bottom, you will write the total for all liabilities. In this example, we have $315,000. Ouch!    Now, we have the numbers we need to calculate net worth. Remember, net worth equals assets minus liabilities.     In my example, the assets total $375,000, while the liabilities amount to $315,000, resulting in a total net worth of $60,000. Not too shabby.     Let's say you calculated yours, and you didn't like what you got. You got a negative number. This means that your debts exceed the value of your assets. Let's flip my example and say you have a negative $60,000.     Do not get discouraged. Many families and individuals are right there with you. According to MarketWatch, one in five Americans has a zero or negative net worth. You're not alone in this journey. Instead of dwelling on it, get motivated to get that number into the positive. You got this!    Here are a couple quick tips on how to improve your net worth:  Work to pay down existing debts. Focus on developing a method to really pay down debt. Read a book, attend a seminar, or watch one of our debt reduction webinar recordings on YouTube to learn all about the process of taking control of and tackling debt. Check the link in the show notes to watch.   Avoid taking on any new deb