It’s no secret that boosting your net worth is entirely possible if you use the right methods. Savvy investors and individuals keeping an eye on the family budget have been using several tried and true strategies for decades. The really good news is that you don’t need to be a financial planner or tax expert to ramp up net worth in a matter of months. Keep in mind that patience pays big dividends in this endeavor, so be ready to take action and then wait a while before seeing solid, measurable results. However, a few of the methods listed below can deliver quicker results depending on your personal money situation.
Not all methods will work for everyone. For example, if you already own a home or have already refinanced student loans, then you’re okay in those areas and can move on to some of the alternatives on the list. Always remember to begin slowly, keep very accurate records of everything you do and measure results when they begin to take effect.
1. Earn More
It almost sounds too simple, but many people overlook this solution to a net worth dearth. Earning more money can mean different things. For some, working a few extra hours per week at a second job does the trick. Even ten additional hours in every five-day cycle can add up quickly.
Another variation of the earn more technique is taking on a part-time job on weekends or during the week. This approach works best for younger, hardier folks who are content with the added workload of a side freelance opportunity, even for only a few months. Finally, you can always try to earn more at your current job by getting a raise. That means becoming proactive, making sure to ramp up your performance for a few months before springing the question on your boss, and having an alternative strategy in place. However, the fact remains that making more money through work is one of the most direct and uncomplicated ways to improve your net worth.
2. Purchase a Home
If you’re currently renting, you have a golden chance to quickly add to your personal bottom line. Get out of your apartment and purchase a home. Even when you have little equity built up in the new abode, your monthly payments will, at least, be going toward equity rather than an expense. Some people view this method as an accounting trick because you’re just changing your place of residence. But, in the long run, your financial wellbeing can go way up as a result of being a homeowner.
Don’t fall into the trap of thinking you have to put down as much money as possible on your new home. Make only the down payment amount required by the bank so as to free up funds to pay off any high-interest debt, like credit cards or medical bills, that you currently have on your books.
3. Refinance Student Loans
Another method used by people who have college and graduate degrees is student loan refinancing. The goal here is to renegotiate your education loan and take advantage of three unique benefits which are a lower interest rate on the debt, lower monthly payments and a longer time to repay the student obligation. Refinancing from Earnest.com is a smart, and relatively fast, way to improve your financial situation.
You’ll have more disposable income available each month due to the lower payments. That extra cash can go toward investments, paying down high credit card bills or putting a little extra toward your mortgage each month.
4. Cut Spending
You don’t have to take a chainsaw to your budget, but it’s a good idea to scrutinize your spending habits with the aim of chopping away some of the unnecessary expenditures. Do you really need that health club membership, the second car, a long vacation every year, and all those meals out? In truth, those are four of the most common places where people find themselves spending to excess. Even reducing your habit of eating out by half, you can sock away a large chunk of change each month.
If you like to use apps to hone your budget, consider any of the free expense cutting apps available for no cost download. These clever little pieces of computer code can assist you with finding waste by comparing your budget numbers and percentages with those of millions of others. You’ll get a quick take on whether your spending is above or below national averages in hundreds of different categories. No matter how much you currently earn or save, budgeting apps can help you cut expenses by a lot.
Investing is not a quick way to improve your financial picture, but it’s one of the best long-term approaches. Even putting a fixed amount of money, like $250, into a balanced stock fund each month can earn generous dividends for the average investor. Try to stick to conservative stocks and funds so you won’t need to worry about a likely drop in equity.
Some of the most famous financial gurus in the world have built their wealth with this technique alone. It takes perseverance, the ability to handle occasional downturns and basic knowledge of the market. But studies have shown that a slow, conservative buildup of a stock portfolio can add to your monetary wellbeing over the long term. The thing to remember is to diversify, avoid high brokerage fees and stay up to date on current events. There’s no need to become a financial guru, but as long as you know how the market works and what the general state of the economy is, you’ll be better off.
6. Open a Roth IRA
Roth IRAs are funded with after-tax income. They offer unique advantages to people who want to earn interest without the future burden of Uncle Sam taking a cut out of the financial pie. Unlike ordinary IRA’s, Roth’s allow you to create wealth slowly with after-tax contributions. There are a few restrictions about withdrawals and contributions, but not nearly as many as there are for traditional IRA’s.