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Personal Finance

How to Start Increasing Your Net Worth Today

There are two ways to increase your net worth: increase your assets and decrease your liabilities. While having only two variables in the equation may make it seem simple, actually making it happen can require time and effort.

Here are five steps you can take to get your net worth to where you want it to be.

Calculate Your Net Worth

You can determine your net worth by subtracting your liabilities from your assets. Liabilities include anything you owe, such as credit card debt, a mortgage loan and student loans.

On the flip side, assets are anything you have that you could potentially use to pay off debt. This can include checking and savings account balances, investments accounts, a home or a car.

To calculate your net worth:

  • Pick a date: Your net worth is a snapshot of your financial situation at a single moment, so pick a date, either at the end of the month, quarter or year, on which you'll calculate your balances.
  • Gather the data: Log into your online accounts and pull up statements from all of your assets and liabilities to determine their balances on the date you chose. If you're counting a vehicle or a home, use the fair market value based on the last appraisal or an educated guess based on the value of comparable homes and vehicles in your area.
  • Do the math: Start by adding up your assets and liabilities separately, then subtract the latter from the former.

Note that if your liabilities exceed your assets, your net worth will be negative. This means that you cannot currently pay off all of your debt if you lose your job or something else happens that has an adverse impact on your financial health.

If your assets exceed your liabilities, however, that means you can satisfy all of your debts with what you already own, with some money to spare.

Pay Off What You Owe

Having liabilities isn't necessarily a bad thing, especially if your interest rates are low and your monthly payments are affordable. But if you have a negative net worth or your debt is keeping you from achieving your ideal number, work on getting out of debt.

To do this, start by listing everything you owe. Then target your highest-interest debts, such as credit cards and subprime loans, first. Then work down the line to lower interest rates. Alternatively, you can start with the debt with the lowest balance and work your way up to the one with the highest balance.

As you're working to pay down your debt, consider calling your creditors—especially credit card companies—and asking for a lower interest rate. While you may not be successful every time, you may get a pleasant surprise from at least one of them.

If you're dealing with very high interest rates, consider using a balance transfer credit card or a debt consolidation loan to help lower your interest rates and give you a head start on eliminating your debt.

As you pay down your debt, your debt-to-income ratio (DTI), which is a key factor lenders consider when you apply for a loan or credit card, will also go down. A lower DTI can also help increase your credit score, giving you more opportunities to qualify for credit at favorable rates.

Look for Additional Income

It's not always easy to find ways to earn more money, especially if you're already working multiple jobs or you don't have a lot of free time for other reasons.

If you can manage it, though, there are some simple ways you can find some extra money:

  • Reduce your tax withholding from your paycheck: If you get a big tax refund every year, you don't have to wait until you file your return to get all that money. Talk to your payroll manager about decreasing your tax withholding. While it'll decrease your refund, it'll boost your cash flow throughout the year.
  • Ask for a raise: This isn't always easy, but if you've been working for your employer for a while and have proven yourself worthy of a pay increase, you may be successful.
  • Take on more work: If your employer offers overtime and you can manage it, consider taking on extra hours to increase your take-home pay.
  • Look for other ways to make money: If you have some extra time, consider other money-making ideas, such as selling off old household items, taking on side gigs through Craigslist and other job boards, or starting a business on your own.

Increasing your income significantly can take time, but it can be well worth the effort when you're trying to increase your net worth.

Learn to Budget and Save

While your expenses aren't directly included in the net worth calculation, they are indirectly by how they affect your assets.

By budgeting each month and finding opportunities to save more money, you can increase your bank and investment account balances, which, in turn, affect your net worth. Take a look at your expenses over the past few months and put them into different buckets, including groceries, rent, utilities, entertainment and so forth.

Then tally up how much you've spent recently in each of those categories. If you find that you're overspending in some discretionary categories, set a goal to spend less going forward and track your efforts to keep yourself accountable.

Making a budget can be as complicated or simple as you want it to be, so as you go through the process, determine what works best for you, as well as your spending habits and savings aspirations.

Boost Your Credit Score for a Higher Net Worth

A higher credit score can make it easier to qualify for low interest rates, giving you more affordable loan options and saving you money on interest.

As you work to pay down your debt, your credit score may start improving automatically. Another way to accomplish the goal is to use Experian Boost , which incorporates your positive payment history on phone and utility bills into your FICO® Score* .

To take advantage of the service, you'll connect your bank accounts, and Experian will look for phone and utility payments to include. You'll verify which payments you want to be added to your credit file, and you'll see instant results.

Between this and the other steps, you can be on your way to a higher net worth in no time.


Want to instantly increase your credit score? Experian Boost helps by giving you credit for the utility and mobile phone bills you're already paying. Until now, those payments did not positively impact your score.

This service is completely free and can boost your credit scores fast by using your own positive payment history. It can also help those with poor or limited credit situations. Other services such as credit repair may cost you up to thousands and only help remove inaccuracies from your credit report.

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