The term “net worth of a household” refers to the calculation of a household’s financial well-being. It provides a snapshot of a household’s overall financial position by taking into account its assets and liabilities.
The calculation of net worth is a crucial aspect of financial planning. It helps households make informed decisions about their finances, such as managing debts, investing for the future, and planning for retirement. Historically, the concept of net worth has been used by financial advisors and institutions to assess the financial health of individuals and families.