6 second take: Your financial worth isn’t just how much money you have in your bank account. Calculating your net worth can demonstrate the actual value of your monetary assets.

Net worth can be a confusing concept to wrap your head around, but it’s actually much simpler than you might think. So what is it and how do you calculate it? Well …

Your net worth is a tangible representation of all of your finances in number form. It shows you where you stand in comparison to others. Essentially, it takes your assets and liabilities into account — weighing the positive and negative elements of your financial profile — and gives you a number, either positive or negative.

If it’s the latter, don’t worry. It’s possible to jump-start your money situation and get yourself back in the black. Look at your net worth as a snapshot of your finances  —one you should aim to check every six months. It’s a way of tracking your financial progress.