How to Increase Your Net Worth

In order to establish wealth, you must determine and continuously increase your net worth. Your net worth reveals how well or poorly you are handling your money. After you have gathered all of your financial statements and determined your net worth, look for areas to increase your assets or reduce debts.

Difficulty: Moderately Easy

Instructions

Things You'll Need:

• Current Net Worth
• Calculator
• Paper
• Pencil

1. Accumulate or maintain three (3) to six (6) months of household expenses in a savings or money market account for an emergency fund.

2. Increase the value of your savings account by switching to bank with a higher interest rate. Generally, online banks offer higher rates than most local banks.

3. Setup an automatic savings plan with your bank, so deposits are made automatically and electronically on a biweekly or monthly basis.

4. Start contributing or increase your contributions to your 401K, IRA, or other retirement accounts.

5. Develop a systematic plan to reduce personal debt (credit cards, car loans, student loans, etc) by listing them smallest to largest by payoff amount.

6. Pay the minimum on all of your debts except the smallest debt. Use any extra cash to attack the debt.

7. Once your smallest debt is paid off, attack the next smallest debt on your list.

8. Repeat Step 6 until all of your debt is paid off.

9. Stay out of debt by using cash.

10. Continue to track and evalute your net worth on an annual basis.
    
    
    
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Tips & Warnings

• Creating a monthly budget will help you to plan for and track expenses.

Resources

• Calculate Your Net Worth
• Find an online bank
• How to Manage Money
• Learn More About Personal Finance

[reamere]

on 12/27/2008 good tips and simple steps.

[MIghtyDreamer]

on 8/4/2008 these are tips that will work