Is Your Net Worth Above Average for Your Age?

Your net worth is a good number to keep track of, as it gives you an idea of how you're doing with personal finance. You can calculate your net worth by adding up the value of your assets and subtracting any debts you have. For example, if you have $100,000 in investment accounts, $25,000 in bank accounts, and $10,000 in debt, then your net worth would be $115,000.

The median net worth is $192,900, according to the Federal Reserve's latest Survey of Consumer Finances. This varies with age, and it tends to go up as people get older. Want to see how your own net worth compares with the average for your age range? Here's the recent data.

The average net worth by age

Here are the median net worth numbers by age in the United States:

• Less than 35: $39,000
• 35 to 44: $135,600
• 45 to 54: $247,200
• 55 to 64: $364,500
• 65 to 74: $409,900
• 75 or older: $335,600

As the numbers show, building net worth takes time. Young adults have the lowest average net worth because they haven't had much time to grow their savings and investments yet. Some even have a negative net worth, like those who took on debt to go to college.

Net worth rises with age for several reasons. People make more money as they get older. Those who save and invest regularly are able to grow their net worth year after year. When you invest, your money can also earn compound interest -- interest on top of the interest you've already earned.

If your net worth is above average for your age, that's a good sign. If it isn't, don't let it get you down.

Everyone's situation is different, and this doesn't mean you're doing poorly with money. Net worth can take a hit for reasons outside of a person's control. A recession could cause a temporary loss in your stock portfolio, or you could have unexpected medical bills that drain your savings. Those are just a few examples of how your net worth could unexpectedly drop.

Financial habits to follow for a high net worth

It's interesting to compare your net worth to the average. But what's most important is that your net worth is trending upward, and that you eventually have enough to retire when you want.

Building your net worth is a process. Most people don't get rich overnight. It's the result of years of responsible financial habits. Here are the best habits to follow to increase your net worth.

• Spend less than you earn. Your net worth ultimately depends on how much you're able to set aside from each paycheck. If you spend every penny, then your net worth will be stuck in neutral. Commit to saving a specific amount each month -- 10% to 20% of your income is a good place to start.
• Build and maintain an emergency fund. It's best to avoid debt, especially expensive credit card debt. That means you need to be ready for unexpected costs so you don't need to take on debt to pay for them. Work on saving until you have an emergency fund with at least three months of living expenses. When you use that money, make sure to replenish it as soon as possible.
• Set up retirement accounts. These are a great way to save for the future because they help you save on taxes. If your employer offers a 401(k), it's probably worth taking advantage. Many employers will match your 401(k) contributions up to a certain amount. You can also open your own individual retirement account (IRA).
• Invest in stocks. The stock market has historically delivered an average return of about 10% per year. It's one of the most effective ways to build wealth. You can invest in the stock market through investment funds that buy a large number of stocks, such as mutual funds. These are typically available through retirement accounts, and you can also buy them through brokerage accounts.

Building your net worth is not complicated. If you adopt the right financial habits, your net worth will soon be trending in the right direction.