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15 Ways to Save More, Owe Less and Boost Your Net Worth in 2018

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

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Maybe this is the year you finally want to save enough money to go to Paris with your significant other. Perhaps you just had children, and thoughts are looming about saving for their future college education. Or maybe you’ve simply decided that you’d like to have enough money to live lavishly once retirement comes.

Whatever the case may be, there are tangible steps you can take to boost your income and improve your overall net worth this year.

The first step is simply calculating your net worth. Understanding your net worth is arguably one of the most important ways to get a clear picture of where you stand financially after hypothetically ridding yourself of liabilities with your assets.

And it’s simple to calculate: “Subtract what you owe from what you own,” said Tiffany Aliche, a financial educator and founder of the Live Richer Challenge. This January, Aliche, also known as the “Budgetnista,” sponsored a multi-week challenge with hundreds of thousands of participants to educate them on the power of boosting their net worth.

Once you know your net worth and determine whether that figure puts you in the red, the next step is a bit more challenging: finding ways to increase it over time.

Get started with these tips to boost your net worth with any or all of the strategies below.

Earn More 

Ask for that raise. This is the initial move to take toward increasing your annual earnings. “Start by establishing where you are,” said Stefanie O’Connell, author of “The Broke and Beautiful Life.”

“Do your research to figure out what the current pay range is for your position by talking to recruiters, speaking to friends and colleagues in similar positions, or by using a website with salary information like Glassdoor or PayScale,” she said.

Consider the cost of living in your city when you negotiate, too. An accountant in Charlotte, N.C. might be paid much differently than an accountant in San Francisco, where costs are much higher, for example.

“Establish where you want to go,” O’Connell said. “What are the going rates in your field, and where do you fall in that pay range? Given your competency and the value you add to your workplace, where do you think you should fall within that pay range?”

If no raise is possible, ask for something else in its place. In you’re denied a raise, don’t be afraid to ask for something else, suggests O’Connell. For example, you could ask for equity in your company if it’s available to employees. Once that equity is vested (meaning, it’s totally available to you to use), you can leverage it in a number of ways and potentially grow it over time if invested properly. That will no doubt boost your net worth.

Other soft perks to consider include a more flexible schedule, more paid time off, access to educational programs, an expense account, a club membership, a bigger office or a new job title.

These may not have a concrete impact on your financial bottom line, but they could definitely add value to your quality of life and make you a more productive worker.

Turn your hobby into a real business. During Aliche’s Live Richer Challenge online workshop, she encouraged people to look into starting a side business to bring in additional income.

“I had people create a mind map of what they’re good at, what they’re passionate about, and [had them] ask their family and friends: Looking at this, what do you think I could start or open?” Aliche said. “Something that’s going to increase your income so you can increase how much money you have saved.”

Thanks to the gig economy, options for side hustles are endless. If none of the obvious outlets appeal to you (Uber, Favor, Amazon Flex) don’t worry. From designing T-shirts and selling them on Etsy to being a remote personal assistant, there are myriad side gig options out there. 

“I suggest people do side hustles that are related to what they went to school for or what they’re currently doing,” Aliche said. “When I was a schoolteacher, I side hustled by tutoring and babysitting. You get paid more because you’re already doing it, and there’s no learning curve.”

Look for unexpected income sources. If your skills have lead to additional side income, look for ways to lock in lucrative business contracts.

Aliche says it snowed in her city recently, and she discovered the city had a contract for $210,000 for snow cleanup. You didn’t need a snow plow or even experience to secure the contract. All you needed was a license to drive the vehicle.

In addition, her city’s zoo had a $25,000 face-painting budget, and her friend secured the contract because she was the only one who applied. “You have the ability to lock down good money for doing something you’re already doing,” Aliche said. You need an LLC to secure a contract, but they’re typically only around $125, according to Aliche.

Put your tax refund to work. “Most taxpayers who use the standard deduction will get a tax cut this year,” said Jane Bryant Quinn, author of “How to Make Your Money Last: The Indispensable Retirement Guide.”

“Instead of changing your withholding schedule, consider leaving it alone and collecting the tax cut as a refund in 2019, and save the refund.” 

Figure out your hourly rate. You can figure out exactly what your time is worth using this Norwegian website  by FINN.no AS, an online classified advertising marketplace. This tool is good not only for figuring out what you should charge for freelance or contract work, but also for determining which things you should do, and which you should outsource.

For example, it might be worth your time to hire someone to clean your apartment once a week, or you might find it’s easier to do your taxes yourself rather than hiring an accountant.

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Invest wisely in your 401(k). If you’ve already invested a significant amount in your 401(k) and you’re younger, Quinn suggests taking more risks. “If you’re under 40, don’t be afraid of investing 100 percent of your 401(k) or other savings into stock-owning mutual funds,” she said. The stock market will fall from time to time, but it tends to rebound in time, and you may be better off riding the rough patches if you’re investing for long-term growth.

Start an Individual Retirement Account (IRA). If you don’t have a company 401(k), or you’ve maxed out your contribution for the year, don’t worry. “Start an IRA at a low-fee purveyor of mutual funds such as the Vanguard Group or Schwab,” Quinn said. “Buy an index fund that follows the U.S. market as a whole or the total U.S. and global markets as a whole.”

Look into automatic advising companies like Acorns. If you’re interested in investing but aren’t sure where to start, Aliche suggests dipping your toes into robo-advising, or services like Acorns, Betterment and Wealthfront. “A lot of people don’t know where to begin investing, and that’s truly the only way to grow wealth,” Aliche said. “You have to invest.”

Delay receiving Social Security. “For older people, delaying Social Security collection for even six months can have a big impact on lifetime net worth,” said Teresa Ghilarducci, professor of economics at the New School for Social Research in New York City and author of “How to Retire with Enough Money.” For example, if you delay until age 67, you’ll receive 108% of the monthly benefit and if you delay until age 70, you’ll get 132% of the monthly benefit.

Reduce expenses

Keep a record of your expenses. This might seem basic, but if you’re not doing it yet, you should be. “Keep a record of expenses and review every month,” said Ghilarducci. “This one low-energy, low-cost habit can help people identify where they are being overcharged and where they spend money without much pleasure.”

Attack your debt head-on. One half of the equation when it comes to increasing net worth is paying off debt. Aliche suggests an automated plan, like Dave Ramsey’s well-known debt-snowball method, in which you pay off debts from smallest to largest. 

Ghilarducci also emphasizes the importance of paying off debt, especially high-interest debt like credit cards. “If people can pay off all their debts, they earn a guaranteed rate of interest far above what they can earn risk-free in the stock market or anywhere else,” she says.

That being said, you should also try to keep saving as you pay down your debts. If you don’t have an emergency fund set up for the unexpected expenses, you might find yourself only digging deeper into debt.

Also, consider how much that debt is costing you versus how much you could gain by saving. It might make sense to throw every last penny at that 22% APR credit card. But it might make less sense to forfeit your 401(k) savings in favor of paying off a low-interest mortgage or auto loan more quickly. 

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Maintain good health. “An overlooked way of saving money is not getting sick,” Ghilarducci said. “Everyone over 20 should pretend they have diabetes and eat a diabetic diet. It’s good insurance against the rising cost of health care, insurance premiums and copays.”

In a less dramatic fashion, you could simply strive to stay on top of your health and preventative treatments that could stave off illness down the road. Maintain your annual checkups and don’t let minor health issues spiral out of control.

Find ways to trim expenses. Whether you grab takeout way too many nights a week or have a penchant for Whole Foods, groceries and eating out are a perfect area to cut back. Try shopping at a cheaper grocery store, or making a goal to cook four nights a week. You might even try becoming a vegetarian, temporarily. “Vegetarianism has lots of pluses – it’s cheaper and healthier,” Ghilarducci said. “A good diet is a good way to raise your lifetime net worth.”

Sell unused items in a Facebook Buy/Sell/Trade group. Groups for selling anything and everything abound on Facebook. If you’re addicted to shopping at Anthropologie or love rare Nikes, there’s a group for you. Some extremely popular groups—such as Lululemon Buy, Sell and Trade — have over 50,000 members.

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Jamie Friedlander
Jamie Friedlander |

Jamie Friedlander is a writer at MagnifyMoney. You can email Jamie here

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7 Ways to Increase Your Net Worth

The editorial content on this page is not provided by any financial institution and has not been reviewed, approved or otherwise endorsed by any of these entities.

7 Ways to Increase Your Net Worth

The more than 75 million young adults that make up the millennial generation had a lot against them as they entered adulthood. The largest and most diverse generational cohort came of age during the financial crisis. They pursued higher education at a higher rate than the two generations before them despite skyrocketing education costs, and many older millennials faced a tough job market upon graduation.

The financial crisis coincided with a boom in college and graduate school attendance. This wasn’t much of a surprise, considering education has always been considered a reliable way to increase wealth. However, a recent study by the Young Invincibles found that despite being the most college-educated generation in history, the average millennial’s net worth is still half of what the average baby boomer’s net worth was at the same age.

To explain why, the Young Invincibles looked at how an increase in student loan debt and average wages has worked against college graduates. According to the results of the study, millennials are not just being held back by student loan debt — about $27,000 on average — but they are also earning an average of 20% less than boomers earned at the same age.

Why all the concern over millennials’ net worth? We’ll explain why your net worth matters and what you can do it increase it.

What Is Net Worth?

Your net worth is fairly simple to determine. It’s what you have left over after adding up the assets you own and the debt and other financial liabilities you have as well.

In short, it’s how much you own versus how much you owe.

Your assets are a combination of the cash you have in the bank, investable assets like your 401(k) or investments in the stock market, and the current value of your home and your car.

Your liabilities are your debts. That’s essentially everything that pops up on your credit report like credit card debt, student loan debt, auto loan or mortgage (yes, equity you have built in your home is an asset, but the mortgage you took out to buy the home is a financial liability).

Calculate your net worth by subtracting your total liabilities from your total assets.

For example, you could be a doctor earning $300,000 a year, with $80,000 in savings and $100,000 in your retirement account, but if you have a mortgage worth $400,000, $130,000 in student loans to pay off, and $10,000 in credit card debt, you would have a negative net worth. ($180,000 - $540,000 = -$360,000)

How to Increase Your Net Worth

Hate to break it to you, but outside of receiving a large unexpected inheritance, there is no quick fix to growing your net worth.

However, as a millennial, time is on your side.

“Building up your financial situation takes time, a good plan, and a lot of persistence,” says Peter J. Creedon, a certified financial planner at Crystal Brook Advisors in Mt. Sinai, N.Y. “Life is about choices, and good behaviors take time to form and discipline to adhere to.”

Follow these tips to grow your net worth:

  1. Work with What You Have

So, you’re saddled with student loan debt and earning 20% less than your parents’ generation, but you’re determined to grow your net worth. It may be time to make like Beyonce and turn lemons into lemonade.

“Millennials can't change their college debt situation and may not be able to increase the wages from their full-time job,” says David J. Haas of Cereus Financial in Franklin Lakes, N.J. “So the important thing is careful money management to make the most of what they do have.”

Practicing a daily budget is an excellent first step toward increasing your net worth. If you can master the practice of spending less than you earn each day, then each week, each month, and eventually each year, you’re on your way to a higher net worth.

If you’re not into calculators and spreadsheets, there’s good news: It’s never been easier to use technology to do the hard work for you.

By automatically scheduling savings to disperse to different goals such as an emergency fund or retirement savings, “millennials can train themselves to live on less while building their net worth a little bit at a time,” says Daniel Andrews, a financial adviser at Well-Rounded Success in Greenwood VIllage, Colo.

  1. Look for a job with growth potential

If you went to college and took on student debt like many millennials, chances are high that your net worth will be in the red. If that’s the case, you should focus on creating a plan to earn more and owe less over time says Allison Vanaski, a financial planner with Arcadia Wealth Management in Smithtown, N.Y.

“You shouldn’t be worried if you are young and have a negative net worth, but you should be worried if you don’t have a plan [to grow your net worth over time],” Vanaski says.

By focusing on increasing your earnings over time, you’ll have more cash on hand to pay down your debts and build up your cash reserves. All the while, you’re laying groundwork for a higher net worth.

Ask yourself if you’re in a position with room for growth or increased income because that is a surefire way to increase your networth. If you’re not, it could be time to look for a job with more opportunity for growth.

  1. Take Advantage of Your Employer Benefits

One of the easiest things you can do to increase your net worth is to maximize employer benefits like a 401(k) match, flexible spending account, or health savings account.

Roger Ma is a New York-based financial planner at Life Laid Out. He says to maximize your retirement contributions to fully take advantage of any 401(k) match you get from your employer. This is like getting a guaranteed return on your retirement investments — for free.

To put this in practice, imagine your employer matches 50% of what you contribute to retirement up to 5%. At the very least, you should set aside 5% of each paycheck for your 401(k) to capture the full match.

Flexible spending or health savings accounts can seem intimidating to figure out, but they are a great way to save on health care expenses. Health care is only getting more expensive each year, and it can quickly eat away at your budget. When you put money into an FSA or HSA, you’re doing so with pre-tax dollars, giving you extra money for those costs.

Even little perks like commuter benefits can add up over time. Those accounts allow you to use pre-tax dollars to pay for transportation costs.

  1. Get a Side Hustle

You might find an excellent job with great upward mobility but still not feel like you’re earning quite enough to be able to pay down your debts. Leaving your job may not be the answer if you feel you have potential to grow and earn more there. Instead, look for ways to capitalize on a talent or skill to bring in additional income.

“The job market is getting better right now. Don't be afraid to look around to see if you can find a better job which pays more, or think about picking up a little extra money by participating in the gig economy,” says Haas.

Technology has significantly lowered the barrier to entry for many gig-type jobs. Making extra cash on a Saturday by driving for Uber, soliciting your talents on Fiverr, or helping someone get work done via TaskRabbit weren’t options for Gen-Xers. Today, almost anyone with an internet connection can make extra cash relatively easily. An added advantage for millennials is that you can use these tasks to develop job skills to increase your human capital and increase your earning potential.

  1. Save Up While You Pay Down Debts

There are some things you shouldn't do at the same time — like texting and driving — but you should definitely work on your savings and debts at the same time.

Saving while you have so much debt to pay off can feel like an impossible ask. But it’s important to prioritize savings just as much as paying down debt. Without cash reserves on the side, you’re more likely to take on more debt when unexpected expenses pop up over time (and trust us — they always do). An early savings goal should be to save at least three months of monthly expenses. Accomplish that while you make minimum payments on your other debts. Once you’ve reached that goal, you can save a little bit less and put a little bit more toward your debts.

Doing both also gets you into the habit of saving, so that once your debts are all paid down, you have already built a good habit. At that point you should start to think of how much you want to increase your savings rate instead of just getting your saving started says Vanaski.

“Saving 20% of your earnings would be a great target, but even if you can only save 5%, start there and increase it by a percentage every year,” Haas says.

  1. Don’t Be Afraid to Invest

Once you've been able to save money for emergencies, you can begin to focus on saving for long-term goals. The best way to achieve long-term goals like retirement is to get into the market and invest. We get it — the stock market can be intimidating, especially for a generation that came of age during one of the worst financial crises in history.

According to a 2016 Bankrate study, only one-third of millennials own stock, while about 51% of Gen X-ers and 48% of baby boomers invest in the market.

Investing doesn’t have to be rocket science, and you don’t have to (and honestly, you probably shouldn’t) get into buying and selling individual stocks.

By simply setting aside 5%-10% of your paycheck in a 401(k) or IRA, you’re investing in the market. Many employer retirement plans have advisers on hand to help you pick your investments.

The important thing is to start as soon as possible, as early as possible. Time is a huge asset when it comes to investing since your earnings will have more time to grow and compound for decades.

If you’re stuck between paying down debt and investing, that’s understandable. If you have high-interest debt, like a credit card, with an APR over 8%, then you should absolutely focus on paying that debt down first and aggressively.

For more information on investing, check out these posts:

How to Set Up Your Investment Strategy for 2017

5 Things Millionaires Understand About Investing

It’s also important not to mistake making large purchases as increasing your net worth. Like we mentioned earlier, a home can be considered an asset but ONLY if the home becomes worth more than the loan you borrowed to pay for it. This is why the housing crisis of 2008 was so devastating to so many homeowners — suddenly, their homes were worth significantly less than they paid for them or could sell them for on the market.

  1. Invest in Your Human Capital

Increasing your income can help you increase your net worth just a bit faster. A possible way to do that is to invest in your human capital: the skills, knowledge, and experience that you have that adds value to your worth.

Constantly develop skills related to your field or a field in which you may be interested in entering. You can use a wealth of online resources to develop your skills in various areas, such as web development, podcast editing, or management, with sites like Lynda.com or with learning courses on Linkedin. You may even consider pursuing a higher degree if the long-term benefit will outweigh the cost of education.

Advertiser Disclosure: The card offers that appear on this site are from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all card companies or all card offers available in the marketplace.

Brittney Laryea
Brittney Laryea |

Brittney Laryea is a writer at MagnifyMoney. You can email Brittney at brittney@magnifymoney.com

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