13 Million American Households Have Negative Net Worths — Are You Secretly One of Them?
Written by
Laura Beck
Edited by
Molly Sullivan
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About 13 million U.S. households have negative net worths, meaning their debts exceed the total value of everything they own, according to 2019 data. That was roughly 10.4% of all American households at the time, based on the Federal Reserve.
Most people in this situation don’t realize it until they actually calculate the numbers. Here’s how to figure out if you’re secretly among them (and what it means for your financial future).
What Negative Net Worth Actually Means
Net worth is simple math: Add up everything you own and subtract everything you owe. If the result is negative, you’re underwater financially.
According to the Aspen Institute’s analysis of 2019 Federal Reserve data, approximately 10.4% of U.S. households had negative net worth, which translated to around 13 million households.
The 2022 Survey of Consumer Finances found that families in the bottom quarter of the wealth distribution averaged -$5,300 in net worth, up from -$15,700 in 2019. So, while the numbers improved slightly, millions of households still start from below zero.
U.S. Census Bureau data from 2022 confirms this pattern: The 10th percentile of household wealth sits at essentially $0, meaning at least 1 in 10 households have zero or negative net worth.
Who Lives With Negative Net Worth
The demographics tell a clear story. Households with negative net worth tend to have:
- Lower incomes
- Younger household heads
- Higher student loan burdens
According to Aspen’s analysis of SCF data, the median income for families with negative net worth was around $39,700, compared with the national median of around $59,000.
Younger Americans appear disproportionately in this group, often because they’ve graduated with student loans and haven’t yet built savings or home equity. For example, someone earning $45,000 with $60,000 in student debt and minimal savings has negative net worth despite having a decent job.
Disadvantaged groups also appear more frequently in negative-net-worth statistics, reflecting long-standing racial and generational wealth gaps.
Calculate Your Own Net Worth
Most people have never added up their numbers. Here’s how to find out where you stand.
List every asset you own:
- Checking and savings account balances
- Retirement accounts (401(k), IRA)
- Stocks, bonds and other investments
- Home equity (market value – mortgage balance)
- Vehicles worth more than their loans
- Other valuable property
List every debt you owe:
- Mortgage balance
- Car loans
- Credit card balances
- Student loans
- Personal loans
- Medical debt
Subtract total debts from total assets and that’s your net worth.
If the number is negative, you’re in the same boat as roughly 13 million other U.S. households. If it’s near zero, you’re only slightly above the bottom 10%.
What the Numbers Actually Tell You
For context, the median family net worth in 2022 was about $192,900, according to the Federal Reserve’s Survey of Consumer Finances. (The Census Bureau’s household wealth median was slightly lower, at about $176,500.)
If your net worth is negative or near zero, you’re in the lower segment of the national distribution.That’s not a moral judgment. It’s just math showing where you currently stand.
Negative net worth also doesn’t mean the same thing for everyone: a 25-year-old with $40,000 in student debt and $5,000 in savings has a temporary imbalance; a 50-year-old with similar numbers faces a much harder road to recovery.
Why This Matters More Than You Think
Living with negative net worth creates financial fragility. You have no cushion when emergencies hit: Car repairs, medical bills or job loss can push you further into debt.
It also means you’re paying interest on debt instead of earning returns on investments. Every month, money flows out to creditors instead of toward building future wealth.
And the psychological toll is real: Knowing you owe more than you own creates constant stress, even if you’re managing your monthly bills.
How To Move From Negative to Positive
If your net worth is negative, you can change it. Focus on two levers: reduce liabilities and increase assets.
- Attack high-interest debt first. Credit cards charging 20% interest destroy wealth faster than almost anything else.
- Build a small emergency fund. Even $1,000 in savings prevents you from going deeper into debt during emergencies.
- Track your net worth annually. Watching progress. Going from -$15,000 to -$12,000 shows you’re improving.
- Increase income where possible. Side hustles, career growth or new skills accelerate debt reduction and asset building.
- Start investing early. If your employer offers a 401(k) match, contribute enough to get the full match — it’s immediate free money that improves your net worth.
Younger households often move from negative to positive net worth naturally as they pay down student loans and build savings. Older households, with less time to recover, need a more aggressive debt-reduction plan.
You’re Not Alone
Roughly 1 in 10 American households lives underwater financially. If you’re among them, you’re far from alone.
The key isn’t to feel shame; it’s to use your number as a baseline for improvement. Negative net worth today doesn’t have to mean negative net worth in five years if you take consistent action.
Calculate your number, understand why it’s negative and build a plan to change it. The math is simple, even if the journey isn’t.
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