What is your net worth? It’s not just the value of all the assets you have.

To calculate your net worth, add up everything you own and then subtract out everything you owe. For example, you’d add up the balance of your retirement accounts, the value of your home, any other savings accounts that you have and then subtract out the credit card debt, the mortgage and any other debts you have outstanding.

What you’re left with is your net worth. Knowing your net worth — it’s a handy measuring stick for calculating your financial progress in life.

FREE TOOL: Use Bankrate’s calculator to figure out your net worth.