Your net worth indicates the degree of your financial success. Many people try not to think about their net worth because they have little to show for their many years of hard work. When you work hard and see your wealth grow, however, you feel a sense of accomplishment and have peace of mind, knowing that you have a secure future. If you feel stuck or need some advice for adding to your net worth, these five ways to grow your net worth guaranteed.
Debt offsets your assets, so make sure you include your loans and credit cards when you calculate your net worth. To reduce your debt, make sure you pay more than your monthly interest and service charges. To get the biggest return for your money, start by eliminating accounts with the highest interest rates. With lower balances, you will accrue less future interest, allowing you to make larger payments until you pay off your accounts.
Contribute to Retirement Accounts
When you put money into IRA or 401K accounts, you build your net worth, prepare for the future, and defer your taxes. When the government doesn’t take a chunk out of your money, you can put your money to work for you, growing by leaps and bounds over the next few decades.
Control Your Spending
Track your expenses, so you can learn what happens to your money. For many people, the practice of logging every transaction makes them more carefully spend their money. Begin by recording your expenditures on a notepad or in a free online money-tracking app. When you have gained insight into your spending habits, you can find ways to cut waste and budget your money.
Put Your Money to Work
Cash sitting around the house doesn’t grow and can easily get lost or stolen, so think about emptying your cookie jar or piggy bank, and use it to earn more money for you. Similarly, keep enough money in your checking account to cover your expenses and prepare for emergencies, but put the rest in investment or interest-bearing accounts, so it can earn money for you.
Keep Your Car
Reliable transportation helps make your life safe and secure. Whether you buy a new or pre-owned car, make your investment pay off by keeping it until it needs replacing. By doing so, you can control your transportation costs and limit the amount of money you lose to depreciation.
Jonah Engler is a financial expert from NYC.