1. What is Net Debt?

Net Debt is a financial metric that shows the difference between your total loans and your savings. It provides a clearer picture of your financial health by considering both what you owe and what you have saved.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• \( Loans \) — Total amount of money you owe
• \( Savings \) — Total amount of money you have saved

Explanation: A positive net debt means you owe more than you have saved, while a negative net debt means your savings exceed your loans.

3. Importance of Net Debt Calculation

Details: Calculating net debt helps individuals understand their true financial position, plan for debt repayment, and make informed decisions about saving and spending.

4. Using the Calculator

Tips: Enter your total loans and total savings in dollars. The calculator will show your net debt position.

5. Frequently Asked Questions (FAQ)

Q1: What does a positive net debt mean?
A: A positive net debt means your loans exceed your savings, indicating you owe more than you have saved.

Q2: What does a negative net debt mean?
A: A negative net debt means your savings exceed your loans, which is a favorable financial position.

Q3: Should I include all types of savings?
A: Yes, include all liquid savings that could be used to pay off debts if needed.

Q4: How often should I calculate my net debt?
A: It's good practice to calculate your net debt monthly to track your financial progress.

Q5: Does net debt include assets like property?
A: No, this simple calculation only considers loans and liquid savings. For a complete financial picture, you might want to consider all assets and liabilities.