Ways to Increase Your Net Worth

Your monetary value is easy to determine. It’s what you have left over after including all your resources and subtracting your obligations. In a nutshell, it’s how much you own minus how much you owe. Your resources are a combination of the cash you have in the bank, investment resources like your 401(k) or stocks, and the current value of your property, like your home and car. Your obligations are the money you owe. That’s simply everything that you see on your credit report. It could be student loans, credit cards, car loan or a mortgage. So why care about your net worth? Well, if you wish to evaluate your economic success, knowing where all your assets and liabilities stand is key. Keeping track of your net worth will help you know where you are now and what you need to do to improve.

There is no quick fix to increasing your net worth. Building up your economic value requires time, a good strategy, dedication and a lot of self-discipline. Follow these six guidelines to increase your net worth:

  1. Pay Off What You Owe

Reducing your debt is the first step towards enhancing your net worth. Cash you owe is money that could be used to increase your financial value. Pay off all your debts as quickly as you can, recognize high-interest debt and concentrate on that first while paying off smaller interest debt along the way.

You may also consider combining your debt by considering a consolidation loan. Consolidation loans are a good way to take debt with high-interest rates and combine all of it into one monthly payment while paying a lower interest rate. The lower your interest rate is, the less time it will take you to pay off the debt. The National Foundation for Credit Counseling can assist you with making a budget, and if you need more assistance, like consolation, they can help with that too! Most of their services are free. While looking for assistance, make sure you are careful of debt settlement firms, they are mostly out for your money and most of the time can do very little to help you.

  1. Evaluation of Your Assets

You may not know exactly how valuable your assets are, or how that value is going to modify, but you can look at a few things to help you get a good idea of where you are at:

  • Primary residence: You can watch the value of your home increase or decrease on websites like Zillow. Zillow and other online resources will show you the value of your home based on home sales in your area. They also forecast the value of your home, so you can see what direction the market is taking it. The more your home is worth, the higher your net worth is.
  • Vacation home and lease property: Many times, when people buy second homes, they pay for it with cash, or without a taking out a mortgage. If this is the case, then the full value of this home is added to your asset and is a large contributor to your net worth. If you used a home loan to pay for this property, then just like your primary residence, the resale value versus what you paid, or what you owe is where your financial worth is at with this property.
  • Investments: Use smart stock strategies and combine all your shares, ties, shared resources, and tax-deferred pension programs and add these to your total assets. Just make sure to include the taxation on these assets to your obligations.
  • Collectibles: art and antiques—the industry for this type of stuff will go up and down, but you can always have an evaluator help you.
  1. Cut Down on Costs

Most of debt in the US comes from credit cards. Reducing your credit card balance and using only cash for purchases will go a long way to further damaging your debt. The less money you have readily available to invest, the less you’re using to grow your net worth.

Look at your current expenses and see if there are places that you can save money on or eliminate entirely. Make a practice of observing your spending every day for a week, and you will be stunned by how much of your income is trickling away. The purpose is not to give up eating out or quitting your favorite hobby entirely, but instead to become aware of your spending habits and recognize areas where you can adjust; a little goes a long way.

  1. Generate More Money

The job market has been getting better. Don’t be scared to look around to see what is out there. Maybe a better paying job is waiting for you. The more income you must pay off debt, the quicker you can get out of debt and increase your net worth.

If getting a new job is not something you can do right now, today almost anyone with internet access can make extra money relatively quickly. Do you have a skill or an ability to provide a service on your time off? Check out the Thumbtack app! Are you crafty or artistic? Check out Esty or eBay, or go to your community to set up a booth at a craft fair. Don’t be scared or nervous to try out these new avenues; every busy eBayer started where you are. Improving your earnings can help you enhance your net worth much faster than relying on one income, and it could be fun!

  1. Preserve and Invest More

Saving 10% of your income would be a fantastic start, but even if you can only save 5%, start there and increase it by 1% every year. You probably already have a bank that you use for your direct deposit and checking account. Opening a savings account can help you have a place for your savings while earning a small amount of interest. All banks have different interest rates, so be sure to shop the savings interest rates with a few, also don’t forget to check out credit unions. Once you find a bank and open a savings account, see if your employer can transfer a percentage of your income into the account each payroll.

  1. Make an Investment

Savings accounts are great, but there are also many other types of investment accounts that can yield a much higher return. While you’re calling banks, or visiting them for information about opening a savings account, be sure to ask what other savings options they have. Once you have an emergency fund set up, which is typically having enough money to live off for three to six months, start to look at the other options that you find through research or from talking to your local bank or credit union.

Something else you can do is ask your employer if they have any retirement account options. The savings that you put away into a retirement account is not accessible until you are retirement age, so it is important to diversify your savings into a retirement account and something more accessible, but the growth you can experience in a retirement account is incredible. Something else that is cool about opening a retirement account through your employer is that many times, employers will match your contribution or a portion of it at least, that is free money; don’t let it go to waste!

  1. Examine Your Liabilities

Review how much debt you owe every 30 days, where this debt it, and how long it will take you to pay it off. Of these debts, which is the highest interest rate, what are the amounts you owe on each of these? After you have paid off your credit card debt and you just have your home loan or maybe that car title loan in Las Vegas, call the bank that holds your loan and ask about ways to pay it off faster. Many times, you can make additional payments on the principal of the loan without changing your loan agreement. What is nice about just paying additional on the principal instead of refinancing and changing the payment arrangements, is if something comes up, and you need that extra money, you aren’t obligated to send it. Just send your standard monthly payment that month.

  1. Discuss with a Professional

Consulting with a professional is the most important and yet the most neglected thing you can do. People don’t want to approach a financial advisor often because they are embarrassed about the state of their financial situation. Improving your net worth is serious business, and while doing it, you want to make sure you have all the right information, and you are smart while attacking your debt and increasing the correct assets. You may need to pay a small fee, but before you do, call around and check with many firms and your bank. If you have a credit union, sometimes, financial advisors are free. If there is no way around a fee, if you have done your research and the price is fair, the benefit should outweigh the cost.


Increasing your net worth is not something that will happen overnight. It requires careful planning and the desire to see your plan succeed. With a goal and determination, you can improve your financial standing and grow your wealth brick by brick. Good luck!