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Be honest: Did you recently Google how wealthy rapper Bad Bunny or Olympic skier Eileen Gu are?

As curious as we are about celebrities, many of us don’t know as much as we should about our own net worth. In fact, two-thirds of us don’t keep tabs on it at all, CreditKarma research suggests.

The reality is that no matter your circumstances, net worth is a valuable measure of your financial situation. Tracking it helps you gauge your progress in a way that your income or checking account balance doesn’t. And it can show you how you stack up against others at similar points in their lives.

So what exactly is it? Think of net worth as a snapshot of your total financial value, determined by adding up the value of everything you own (assets like cash, investments, and real estate) and then subtracting whatever you owe (liabilities like student loans, credit card debt, or a mortgage). It may change frequently, but generally the idea is to grow your net worth over your lifetime — at least until retirement.

The typical (median) net worth of Americans in their 30s is $23,093, according to January data from Empower, a large retirement plan firm. It jumps to $68,698 for people in their 40s, $180,227 for people in their 50s and $274,564 for those in their 60s before dropping to $220,067 for folks in their 70s — the age most people are using their retirement savings. (Note: If you’ve seen higher figures cited elsewhere, they’re likely averages rather than medians, which remove the effect of outliers.)

Since the pandemic boom in real estate values, homeownership has become a significant driver of net worth, as have rising stock prices. U.S. households’ combined net worth has shot up by more than $69.9 trillion since March 2020, reaching $172.9 trillion as of the third quarter of this year, according to the Federal Reserve. In just the last two quarters, it’s climbed by $13 trillion.

So what? Tracking your net worth can give you clarity and direction about your financial health that you may not get otherwise. While it can be easier to have a higher net worth when you have a higher income, your net worth is also a reflection of what you do with your income and assets and how much debt you take on.

Think about a high earner who’s also a big spender. Let’s say they choose to live beyond their means, racking up debt rather than investing in their future or building equity in a home that appreciates in value. (Four in 10 American workers earning over $300,000 consider themselves living paycheck-to-paycheck, according to a July survey from Goldman Sachs.)

Then consider someone with half as much income who saves more than they spend. They might prioritize their 401(k) match or fixing up a house they inherited from their parents.

Despite the vastly different incomes, the modest earner could actually have a higher net worth, putting them in a better position to send their kids to college, retire comfortably, or reach other long-term goals.

The bottom line: Even if your paycheck and credit card balance aren’t where you want them to be, make a point to calculate your net worth on a regular basis. (An online calculator like SoFi’s can help). And if you’re young and it’s negative — meaning you have more debts (e.g. student loans) than assets — that’s not necessarily a bad thing. What matters more is that your net worth is heading in a positive direction.

Monitoring your net worth can reinforce healthy habits, motivating you to budget your spending, pay down debt, and make the most of your savings. (Maybe you put savings into a high-yield account, invest it, or establish passive income streams, for example.) And measuring your progress can be a real confidence-booster, too. You might even discover your net worth is higher than you think.

Related Reading

Negative Net Worth? Here Are 3 Things You Can Do to Fix It (Yahoo Finance)

The One Financial Number You Shouldn’t Ignore: Your Net Worth (Investopedia)

When Does Home Equity Count in Your Net Worth? (SoFi)

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