6 Effective Ways to Increase Your Net Worth This Year

Your net worth is a measure of how well you’re doing financially. That’s why you should keep track of it and take steps to improve it. Fortunately, there are financial steps you can take to boost your equity.

Here are 6 effective ways to increase your net worth this year.

1. Max Out Contributions to Your Retirement Accounts

If your employer offers a 401k plan, be very happy as they are basically giving you the opportunity to earn free money. With a 401k you have a vehicle to contribute pre-tax income towards your retirement. Contribute as much of your paycheck as you can to that account and you’ll be in great shape when you hit your golden years.

If your employer matches on 401k contributions, so much the better. You’re getting free money on a tax-deferred basis that goes straight to savings. That will put you in even better shape for retirement.

If your employer doesn’t offer a 401k, consider getting an IRA. That’s another tax-deferred means of contributing towards your retirement.

2. Keep Tabs on How Much You’re Spending

One of the best ways to boost your net worth is to keep track of how much money you’re spending on things you don’t really need. When you realize that you’re dropping a fortune on frivolous expenses instead of boosting your net worth, you’ll be incentivized to start saving money. That savings will boost your net worth.

There are several expenses that you should keep track of. Most notably, look at how much money you’re spending on eating out. You can save a small fortune if you cook at home.

Also, take a look at your interest expenses on you credit card balances. Whether you have a Firestone credit card or some other credit card, you’ll find that you can save a lot of money by adopting a “cash only” policy so you’re not paying interest expense on top of the cost of the items that you buy.

3. Get out of Debt

Your net worth is defined by the value of your assets minus the value of your liabilities or debts. If you can reduce your overall debt load, by definition you’ll increase your net worth.

Pay off the credit cards with the highest interest rates first so that you can save money on interest expense. Then, start paying off lower-interest debts.

4. Grow Your Money

Put your money in a place where it’s likely to appreciate in value. Instead of just keeping your money in a checking account that offers no interest, park it in a savings account where you can at least get a minimal return. Better yet, put it in a mutual fund and let it grow over time.

5. Keep Your Car Forever

The cheapest car to have is the one you own. Don’t trade it in for something better just because it’s five years old and you think you need something else. You’ll save a fortune by just keeping the same vehicle you’ve always had.

6. Get Expert Advice

Alas, finance is a complicated discipline. It’s best to talk to an expert if you want to maximize your net worth. Fortunately, financial professionals will sometimes offer a free initial consultation so you can get an idea of what kind of advice you’ll receive.

You should always look for bargains to help build your net worth. Whether you decide to clip coupons, do some comparison shopping, or accept freebies like a free Netflix trial, you should always be looking for ways to minimize the amount of cash that leaves your wallet.