Definition
Liabilities are anything your business or household owes to someone else, such as a mortgage, a car loan, a credit card balance, or a bill you haven’t paid yet.
Why It Matters
Knowing what you owe gives you an honest picture of where you stand financially. Your net worth is what you own (your assets) minus what you owe (your liabilities). For example, if you own a $1M home but still owe $900K on the mortgage, you’re about $100K ahead, while someone with a $200K home that’s fully paid off is $200K ahead.
Lenders also look at how much you already owe, compared to what you earn and how reliably you pay it back, when deciding whether to approve a new loan. Those same habits also affect your credit score
How This Works in Quicken
Your loans, credit cards, and mortgages are set up as accounts, and what you owe on them is subtracted from what you own to show your Net Worth on the Dashboard and Net Worth Dashboard.
You’ll also see liabilities in reports like the Net Worth Report and the Balance Sheet Report Quicken Business & Personal only).
Your Net Worth is only accurate if all of your liability accounts are included, whether you connect them to your bank or lender or add them manually.