What Net Worth Means
Net worth equals total assets minus total liabilities. If debts exceed assets, net worth is negative. This simple calculation shows overall financial position.
Is Net Worth Less Than Debts
Net worth can be less than debts when liabilities are larger than assets. In that case, the result is a negative number. For example, a home mortgage, student loans, and credit card balances may outweigh savings and investments.
How to Improve a Negative Net Worth
Focus on reducing high interest debt, increasing savings, and building assets over time. Tracking income and expenses helps identify areas for improvement. Reliable guidance is available from the Consumer Financial Protection Bureau at https://www.consumerfinance.gov/.
