Household net worth (Nettovermögen)
Household net worth is the value of everything a household owns minus everything it owes, calculated at one point in time. Add up assets — cash, bank balances, real estate, investments, pension entitlements with a cash value — then subtract liabilities such as a mortgage (Hypothek), consumer loans, or a Dispokredit (overdraft) balance. The result is Nettovermögen (net worth): a single snapshot number, not a rate of income or spending.
Why it matters
Net worth answers a different question than a payslip or bank statement does: not "how much came in this month" but "what would be left if every asset were sold and every debt were paid today." Two households with identical monthly income can have opposite net worth trajectories — one saving and paying down debt, the other spending beyond income and financing the gap with credit. German family law also treats net worth as a legal quantity: in a Zugewinngemeinschaft (the default marital property regime for married couples), the change in each spouse's net worth over the marriage is the figure a divorce settlement is built on, not either spouse's income.
Worked example
A household balance sheet. A couple owns a Girokonto (checking account) balance of €4,000, a savings account with €18,000, and an employer pension entitlement worth roughly €12,000 in cash-out value. Their only debt is a €9,000 car loan.
| Item | Type | Amount |
|---|---|---|
| Girokonto balance | Asset | €4,000 |
| Savings account | Asset | €18,000 |
| Pension cash value | Asset | €12,000 |
| Car loan | Liability | -€9,000 |
| Net worth | €25,000 |
Net worth equals €34,000 in assets minus €9,000 in liabilities, or €25,000.
A negative case. A household recently relocated to Germany holds €2,000 in a checking account and no other savings, but carries €15,000 in relocation and setup debt. Net worth is €2,000 - €15,000 = -€13,000. A negative net worth is common in the first years after a move — it states that debts currently exceed assets, and the number moves as debt is repaid or assets are built, regardless of whether monthly income feels comfortable.
Check yourself
A household holds €5,000 in a checking account, €20,000 in a savings account, and a car worth €8,000. It owes €7,000 on a car loan and €1,000 on a credit card. What is the household's net worth, in euros?
Household net worth is best described as...
Which of the following leave a household's net worth unchanged? (Select all that apply.)