What Counts as a Liability When Calculating Net Worth

If assets are what you own, liabilities are what you owe. And while most people are reasonably good at listing their assets, liabilities are where the undercounting happens. Forgetting a liability doesn't make it disappear — it just makes your net worth look better than it actually is. Here's what to include.

Core Liabilities That Always Count

• Mortgage outstanding balance — not the original loan, the amount still owed
• Car loan outstanding balance — again, what remains, not the original amount
• Student loan outstanding balance
• Credit card balances — the full balance, not just the minimum payment
• Personal loans — from banks, credit unions, or other lenders
• Overdraft used — if you're in your overdraft, that amount is a liability

Liabilities People Often Forget

These are the ones that get left out — often because they feel informal or because people prefer not to think about them:

• Money owed to family or friends — if you genuinely owe it, it's a liability
• Tax owed — especially important for freelancers and self-employed people who set aside tax separately
• Buy now, pay later balances — these are real debt, even if they feel like deferred purchases
• Unpaid bills — if a bill is overdue and unpaid, it's a liability

What Does NOT Count as a Liability

• Future expenses you haven't incurred yet — next month's rent is not a liability today
• Regular monthly bills — utilities, subscriptions, and similar costs are expenses, not liabilities, unless they're overdue

Liability type	Include?	Amount to use
Mortgage	✅ Yes	Outstanding balance
Credit card	✅ Yes	Full current balance
Money owed to family	✅ Yes	Amount genuinely owed
Buy now, pay later	✅ Yes	Outstanding balance
Next month's rent	❌ No	Not yet incurred
Monthly subscriptions	❌ No	Expense, not liability

Why Honest Liability Counting Matters

Undercounting liabilities is one of the most common net worth mistakes — and one of the most damaging. If your net worth looks better than it is because you've left out €3,000 in credit card debt and €1,500 owed to a family member, you'll make financial decisions based on a false picture. The real number, however uncomfortable, is always more useful than a flattering one.

Read more: What Counts as an Asset When Calculating Net Worth

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