However, net worth isn’t a concept exclusively applicable to society’s richest, nor is it merely a matter of numbers. Every consumer has a unique net worth, and it’s vital they understand it.

• Why it’s worth knowing

Opinions on why understanding your net worth is crucial are split – but there is little disagreement over whether understanding is crucial.

Karen Barrett, chief executive of unbiased.co.uk, believes it’s important for consumers to know as it allows them to make informed financial decisions on the basis of clear and accurate assessment of their individual circumstances.

“The definition of a good financial decision is one that is best suited to your specific situation at a given point in time. Knowing your net worth can help you pick the right mortgage, level of risk exposure or even bank account,” she says.

David Crozier CFP of Navigator Financial Planning believes understanding allows consumers to appreciate their overall value as an investor, and how much they can invest.

Jason Butler, chartered wealth manager at Bloomsbury Wealth, believes an understanding of net worth helps cultivate a long-term financial perspective. His view is supported by Paul Davies CFP of Capital Asset Management, who believes an understanding of net worth helps consumers better understand the practical ends to which they can put their assets, and think realistically about how they can achieve their long-term goals.

Sarah Lord, managing director of Killik, likewise considers understanding net worth a means of remaining on the right track financially in the long-term, helping consumers save for the future (whether for retirement, or legacy purposes) and enjoy a prosperous present.

• Calculating your net worth

Barrett believes calculating one’s net worth can be a challenge.

“You’ll need to include every single one of your financial assets in order to build an accurate figure, and that will involve some quite detailed analysis,” she says.

Further complicating things is what you choose to include in your calculations. At a minimum, considerations of your net worth should include the value of your assets, investments and savings. Some may choose to factor in the value of possessions (such as jewellery and collectibles), prospective future holdings based on projected appreciation, or the total value of ‘shared’ assets.

Others believe the value of many physical assets shouldn’t be included in net worth calculations. Crozier thinks consumer calculations should be limited to capital that can be spent.

“The value of assets doesn’t tell you very much – a house is a useful and valuable asset for instance, but you can’t ‘spend’ it. If it’s sold, another will have to be bought,” he says.

“The value of your investments and savings – including inheritance due, pension and trust funds, and death benefits – is much more informative.”

Once you’ve decided what to include, and a total has been calculated, you should deduct any liabilities currently held, such as mortgage repayments, loans and credit card debt.

This final figure – all that is owned minus all that is owed – is your net worth.

“Remember that your net worth may be constantly changing,” notes Barrett.

“As a result, it may be advisable to review your net worth every six months, or at least annually.”

• How to use your understanding

Once you know your net worth, the next consideration is what to do with it.

You could choose to compile a financial to-do itinerary – a wish list of desires, benchmarks and aims. These could be specific, or general.

“You may wish to establish a benchmark, after which your early liabilities, such as student overdrafts, loans and credit card debt will cease to exist, and you can focus on building up your future finances,” says Patrick Connolly CFP of Chase de Vere.

“Obviously goals and means differ from person to person, but an uncontroversial universal objective could be being debt-free by retirement, your net worth comprised entirely of assets. Anyone can work towards that point, and most should be able to achieve it, by understanding their net worth and planning accordingly.”

Davies, however, eschews the ‘list’ approach, believing instead that net worth understanding means consumers can reassess their financial present.

“By knowing what you have available to you at any given time, you can be more realistic with your finances – you might view certain prospects with greater suspicion, or indeed be more spontaneous with your investments,” he says.

“If you don’t know your net worth, you don’t know what you’re getting yourself into – and this can mean you miss out, or foul up.”

Butler believes consumers could use it as a motivational tool, to think more positively about their finances in general.

“Even if your overall net worth is in minus territory – your debts cancelling the value of your assets – anything that reduces that debt by definition increases your net worth. That’s a positive gain, even if you don’t think or feel your finances have improved in your favour,” he says.

“Your objective in respect of net worth is progress, not perfection. By viewing any improvement in your net worth as an achievement, you may be more proactive when it comes to growing that total – whether that means exceeding minimum payment requirements on debt, an enhanced reluctance to take on further debt, or investigating new investment opportunities for the short- and long-term.”