This article will go through how to calculate your liquid net worth and why it is crucial to do so.
Liquid net worth represents the value of a person’s assets that can be converted into cash quickly and easily.
Why is it important to calculate liquid net worth? This value is essential because it represents the amount of money a person has available to them in an emergency. If you don’t calculate your liquid net worth and are unaware it is lower than it should be, this can be dangerous.
Liquid net worth is a critical measure as it allows you to evaluate your financial security
How do you calculate liquid net worth?
Related Reading:
- What is Liquid Net Worth & Why It Is Important?
- What Are Liquid Assets – a Definition & More
- A Net Worth Calculator – Find Out Your Net Worth?
Calculate Liquid Net Worth
Your liquid net worth is the value of your assets minus your liabilities.

How do I calculate my liquid net worth? To calculate your liquid net worth, you’ll need to add up the total value of your liquid assets and subtract any outstanding debts and other liabilities.
Liquid Assets
Your liquid assets are those that can be easily converted to cash. Liquid assets are basically cash or cash equivalents that can be easily and efficiently converted into money. Liquid assets include:
- Cash
- Savings accounts
- Money market accounts
- SHORT TERM certificates of deposit or CD’s that will be expiring shortly
- and investments in short-term government bonds.
- Liquid assets do NOT include assets such as your home or car, which would take longer to sell.
- Retirement accounts such as IRAs and 401ks should be considered illiquid assets, unless you are of retirement age.
Ultimately it is up to you to decide what is and isn’t a liquid asset, there are no “rules” per say. A liquid assest is money you can count on in case of emergency.
Because liquid net worth only considers your liquid assets, your liquid net worth will be lower than your total net worth, which includes all assets. Your net worth includes everything you own minus what you owe. Your liquid net worth only includes money you can access quickly minus everything you owe…
How to Calculate Liquid Net Worth
To calculate your liquid net worth, start by adding up the total value of your liquid assets. Then, subtract any outstanding debts and other liabilities. This calculation will give you your liquid net worth.

For example, let’s say you have $5,000 in a checking account, $50,000 in savings, $20,000 in a money market account, and $10,000 in a short-term government bond. Add them up: $5,000 + $50,000 + $20,000 + $10,000, for a total of $85,000 in liquid assets.
You also have a car loan with a balance of $15,000. Subtracting your outstanding liabilities of $15,000 would give you a liquid net worth of $70,000.
Keeping track of your liquid net worth is essential because it’s a good indicator of your financial health. If your liquid net worth is positive, you have more assets than liabilities and are in good financial shape. If your liquid net worth is negative, it means you have more liabilities than assets and may have difficulty meeting your financial obligations. Even worse, if an emergency were to come up, or an unexpected expense – you would need to dig yourself out of debt.
There are a few different ways to calculate your liquid net worth. One way is to use a liquid net worth calculator. Another way is to use a personal finance software program. Or, you can simply subtract your total liabilities from your total liquid assets. Whatever method you use, calculating your liquid net worth is a good way to get a snapshot of your financial health.
Optimal Liquidity in personal Financial Planning
How To Increase My Liquid Net Worth
You can either increase your liquid assets or decrease your liabilities. Here are some ways you can build up your liquid net worth!
- Reduce your expenses will allow you to increase your savings, and minimize your debts. it sounds overly simple – but it is the first step to increasing your liquid net worth.
- Pay off debt and lower your liabilities. Once you have started to lower your expenses, work on the right side of the calculation of your liquid net worth. By lowering the number of liabilities, it will increase your liquid net worth calculation.
- Increase your income – whether it is by getting a raise at work, working a side gig or second job. Increasing your income will help you manage your expenses and debts better. More importantly, it will help you with the next step.
- Save more money. By increasing your savings, you will naturally increase your liquid assets. Increasing the assets you have available to convert to cash will increase your liquid net worth automatically.
- Convert non-liquid assets into liquid assets by selling things – Why wait until an emergency? Sell jewelry, collectibles, a property or land before you need it, and convert those assets to liquid assets. This will naturally increase your liquid net worth, but have no affect on your actual net worth.
Liquid Net Worth Calculator
Your liquid assets are all the cash and investments you have that can be easily converted to cash. This includes money in your checking and savings accounts, money market accounts, certificates of deposit, and investments in stocks, bonds, and mutual funds that can be sold quickly.
Only those assets that you can quickly turn into cash – should be included as an asset in the below liquid net worth calculator.
Liquid Net Worth Calculator
Current Ratio Calculator
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