Last Updated on March 27, 2023
Learn how to increase your net worth in just a year’s time
#MomLife can get expensive. Trust me, I know. As a mother of two, I have not always made my financial health a priority. I spent much of my time just trying to get by day-to-day. I wasn’t even thinking about the future, you know. . . retirement, savings for my children‘s future, my estate, etc.
However, with time, I have learned the value of all these things.
Continuously working towards increasing my net worth is a priority, and I have been learning a lot in the process.
Throughout my wealth-building journey, I have learned quite a bit that I would love to share with my other Mommas out there. Here are 8 Tips to Increase Your Net Worth In a Year.
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‼ The content contained in this post is for informational purposes only. The ideas contained in this article are based on personal opinion and experience and should NOT be considered professional financial advice. ‼
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According to Investopedia, “Net worth is the difference between assets and liabilities.” In order to increase your net worth, you need to increase your assets and/or decrease your liabilities. You always want your assets to exceed your liabilities.
Try to negotiate a raise with your employer. Pick up some extra work. Start a new side hustle. Just experiment with different ways to bring in extra money.
I took on a part-time job in addition to working my digital marketing business and monetizing my blog. I would also pick up extra copywriting jobs from freelance job boards.
Match & Max Out Your Retirement Accounts
If you work for a company that offers a retirement plan such as a 401K, your employer will typically match the amount you contribute up to a certain percentage. This is a great opportunity to work on building your retirement fund. Talk to your human resources department to discuss your options.
Stick to a budget
One practice that has been working for me is to have an end-of-the-month budget meeting with my Husband. During this meeting, we discuss our finances for the current month, where we need to make adjustments for the following month, and an appropriate budget for the upcoming month.
To help me stick to my budget, I don’t limit myself to the point that it’s stressful. I instead look for opportunities to save money on whatever it is that I want. I find Groupons whenever I can for products or services I want or special events I would like to attend.
I take advantage of cashback apps such as Rakuten when shopping. I use apps for my favorite retailers to find good deals.
I also use the Capital One Shopping Chrome extension and MaxRebates to find cashback opportunities and coupons.
I actually earn gift cards for some of my favorite retailers (like the $50 Walmart gift card I recently earned) through Capital One Shopping which saves me a ton of money. Having a weekly grocery list has also been very beneficial.
When I have a set spending limit for the month, it turns my routine into a little adventure as I find creative ways to take care of everything I need without exceeding my budget.
I can then use the leftover money to add to my rainy day fund or other investments. Staying within my budget also helps me to keep my hands off my savings.
Use the snowball method to pay down debt
As mentioned on Dave Ramsey’s website, “The debt snowball method is a debt reduction strategy where you pay off debt in order of smallest to largest, gaining momentum as you knock out each balance.
When the smallest debt is paid in full, you roll the money you were paying on that debt into the next smallest balance.”
I have been using this method to pay off my debt from credit cards to student loans. Remember, part of increasing net worth is decreasing liabilities. Knocking down debt is a very important step towards increasing your net worth. It has also been suggested that you focus on paying off debts with the highest interest rate first.
I was clueless about how to get started with investing. For the longest, I didn’t even bother with it because it just seemed too risky and I really didn’t feel like taking the time out to learn about stocks, bonds, and all that other stuff.
I decided to ease my way into the process by opening an Acorns account. With my Acorns account, I was able to get comfortable with the idea of investing by creating an investments portfolio that was best suited for my situation.
If you are already comfortable with investing in stocks and bonds, you can work directly with brokers such as E*Trade or Fidelity to open a trading account.
Build an emergency fund
One of the things we commonly overlook is the need for an emergency fund.
When working towards increasing your wealth, it is super important to have at least 3-6 months’ worth of expenses tucked away in a rainy day fund. This will help you to stay afloat if life throws a financial curveball at you such as job loss or large unexpected expenses.
It can be easier said than done when we are so focused on just getting by day-to-day. However, with the right resources, you can effortlessly start building a rainy day fund.
To help me get started on building a rainy day fund, I opened a Digit account (now known as Oportun) so that I could easily start placing extra money into savings usin their Roundup feature.
Using this feature, whenever I make a purchase with my debit card, Digit rounds up the amount and places the extra money into my rainy day fund. It is really THAT easy to start building a rainy day fund.
An emergency could be detrimental to your finances if you are not properly insured. You, your home, your car, and anything of value should be properly insured to protect you from spending out excessive amounts of money in the event of an emergency.
Utilize a wealth management tool
Use a wealth management tool like Personal Capital to keep track of your financial health. Personal Capital helps me to track my spending habits and the results of all my wealth-building efforts in one place.
While I may not be a financial expert, these are just a few things I have found that have helped me increase my net worth in just a year’s time. Feel free to share some of your best financial tips for fellow Mommas in the comments below. See you there!