Your net worth may be in a lot of places. Maybe it’s in complete dismay. Maybe it’s trending upward. Maybe it’s doing well and you’re just trying to figure out ways to improve it.
Regardless, when you focus on building it, then you are able to get your financial situation healthy.
Here are 6 ways to swing your net worth in the right direction.
1. Pay down all liabilities. (Pay off your debt!)
Debt sucks. It does. But if you can deal with the problem head on, things will get much easier.
You have to focus on paying off debts if you want to build your net worth. The debt is what keeps your numbers low and will keep them low. But once that debt and ALLLLLLLLLL that interest is out of your life, then building is MUCH easier. First you have to pay off your debts. A good option that helped us to pay off our debt was the Dave Ramsey debt snowball.
2. Begin Budgeting EVERY month
Isn’t the word budget fun? I mean when I hear the word budget it brings me to a happy place…. nope.
No one enjoys budgeting for budgeting sake. Otherwise we wouldn’t do it only when we have to. But you can learn to enjoy the process of looking at the numbers and giving every dollar a name.
When you learn how to budget you’ve built guard rails and a plan that will make your goal of building your net worth a reality. It starts with learning to budget.
Dave Ramsey has an excellent budgeting sheet that I have used. Here is a link to get started.
3. Save Money Every Month
When you learn to save money each month, it becomes a habit you will NEVER regret. Saving is preparing for the future. Not saving shows that you don’t care for your future.
You can save in multiple ways. I am a fan of Online High Yield Savings accounts. I realized that with my normal bank, my savings account made $0.01 every couple of months. When I transferred my money into an online bank with a high yield(APY), then I saw myself getting $6 up to $20 a month. It’s not a lot but it adds up. Have your money make you money.
4. Invest money into your future.
People always talk about the secrets of the rich and all of that, but I’m going to teach you a simple secret that is how many wealthy people became wealthy. The term is simple.
Some people call it the 8th wonder of the world. What happens is that after years of investing, the interests from your investments makes money. What that means is that at first when your investing the growth is slow but then years down the road the growth turns the little snowball into a mountain of snow. It’s amazing. When should you start saving for your future? I’d say NOW!
But with that being said, it does depend on your circumstance. Meet with a financial advisor because depending on your debt, you may need to focus on that first.
5. Get in the habit of saving, planning and being somewhat boring.
We know the story of the tortoise and the hare. The hare ran with no aim. Took naps. In an arrogant way boasted about his ability to beat the tortoise. Meanwhile the tortoise never gave up but did what he knew how to do.
People will come along with bad ideas. They will sound cool and flashy. Recently I saw this. An “investment opportunity” to make 5x my money. The opportunity eventually ran in the ground. Don’t be afraid that you’re not “rich” now. Focus on stewardship over what God has given you. Handle that money well. Do the same old boring thing over and over. Throughout time, you will slowly get to the top of the mountain while everyone else tried to use crazy schemes and never made it. Then they’ll look at you in disbelief that you magically appeared there.
6. Stay Humbly broken before God
What?!? How does that line up?
I’m not going to give you counsel and not mention God. I’m not going to tell you to build your net worth so you can selfishly live your life.
God gives and takes away. He has the cattle on a thousand hills. Having money can be dangerous for the soul. As you seek to build your net worth, stay broken before God so that you have the money and the money doesn’t have you. It may be the grace of God that he doesn’t allow you to have it until you’ve changed your heart some. Money will magnify the person you already are. I know amazing rich people and prideful poor people. As well, I know terribly prideful rich people and amazing poor people.
As you build your net worth, build your walk with God and your trust in him. He calls us to steward what he has given to us.
You want to have your money. You don’t want your money to have you.