Understanding your net worth is considered one of the pillars of financial freedom. If you don't know your net worth, how could you truly understand your finances? Your net worth is quite simply your assets minus your liabilities and obviously the higher the assets and lower the debts equates to a higher net worth.
But how does your number compare? No, we're not talking about comparing to the likes of celebs like Mark Wahlberg or Steph Curry. How do you fare in your state? Personal Capital, a personal finance platform that combines all of your financial accounts into one place (making it easy to see your net worth on a daily basis), used its platform as a means of a survey of consumer finances the determine the median net worth of each state. Using recent data, see where you stand compared to your American neighbors.
It shouldn't be a surprise that California lands at the top of the list (considering the price of rent or owning a home is off the charts). The average net worth there is $884,003. Four of the six New England states land in the top 10, making New England the highest net worth region in the country.
On the flip side, the Great Plains and Southern states are most often at the lower end of the spectrum. North Dakota is the lowest in the country at $339,955.
Net Worth Breakdown by State
It turns out that residents of California have the highest average net worth of any state in the country.
The average net worth of California families is $884,003. Connecticut ($873,746), Washington ($865,309), New Jersey ($810,106), and Massachusetts ($787,154) round out the top five states in average net worth.
On the opposite end of the spectrum, residents of North Dakota have the lowest average net worth of any state in the country. The average net worth of North Dakota families is $339,955.
This chart shows the average net worth of Americans in every state.
Ways to Increase Your Net Worth
If your net worth isn't close to comparing or anywhere you want it to be, there are steps you can take to increase it. Note: The metrics in this report do not include age brackets or persons with college degrees versus those without.
Note: Your mortgage may not be in the cards for a fast payoff but as your home appreciates, that appreciation becomes home equity that is considered an asset for homeowners. This goes for any real estate you may own and carry as investments, which is why many consider real estate one of the best investments
. The lower the interest rate on your mortgage and other debts the better as it means the monthly money you pay into it goes further into lowering the debt rather than paying high interest.
Credit cards typically carry the highest interest rates so paying those off first should be a priority. Student loan debt should be your next target, even if the rates are low.
Another asset is a whole life insurance
policy. Unlike a term life policy that ends at a specified date, whole life insurance holds real cash value; you can even borrow against it (but don't!).
The money you keep in your checking account contributes to your net worth, even if it changing constantly. Finding bank accounts that offer interest or that help you saving with programs like a round-up that rounds up your spending to the next dollar and puts the change in a savings account is beneficial. You'll find these at Bank of America
, for example.
Lastly, living a more frugal lifestyle
can assist with having more money in the bank. Spending less on dining out, clothing, entertainment, and travel – yes, all of the fun stuff – means more that can reduce debt or put into retirement savings and investments. Think of how much more fun you could have to put the $100 you would spend for dinner on the town that lasts a few hours into the stock market where you could watch it grow 8% in two months? (Or is that just me?)
The bottom line
Making the right financial decisions, turning to a financial advisor, and utilizing financial products like budgeting apps, emergency fund savings apps, brokerage apps can help contribute to a higher household net worth. This isn't about bragging rights (although it's a perk). This is about financial freedom and stress-free retirement.