Money·3 min read

How to Increase Your Net Worth

Woman hitting mallet on a carnival game
Illustration: Daniele Simonelli
March 16, 2021

The Story

Don't let income fool you. When it comes to rating financial success, net worth is what tells the whole story. 

Give me a recap. What is net worth?

Your assets (that's the value of everything you own, like your home, car, jewelry, and what's in your checking, savings, and investment accounts) minus your liabilities (aka what you owe on your mortgage or car and your student loans and credit card balances).

Pretty sure mine is zero.

Hate to break it to might even be negative. But remember it takes time to build up net worth. Wherever you're starting from, the most important thing is: you're starting. Plus, some things chipping away at your bank balance each month now (think: a business loan or mortgage payment) could become 100% assets later when you own them free and clear. 

Whatever your current net worth is, you should figure it out for sure so you know your starting point. Use the formula above or this calculator to crunch the numbers.

Got it. So how do I make that number bigger?

Here are four ideas to get you started:

  1. Make a plan to pay down debt. The less you have on the liabilities side of the equation, the better. List out all your debt balances and pick a plan of attack. One popular strategy called the "snowball method" says to tackle your smallest loan first. Once it's paid off, ride that sense of accomplishment toward clearing your next biggest balance. And continuing up by size until you roll through your biggest debt.

  2. Cut your costs. Anything that’s not adding to your net worth is getting in the way of building it up. Including your regular expenses. So check for what you can trim from your budget. Like subscriptions you can downgrade or cancel. Or one less takeout order a week. (And since you'll be cooking more, we Skimm'd what you need to meal prep.) Then, use that money to pay down debt or...

  3. Save more. Experts often say to try putting 20% of each paycheck away for the future. But whatever you have to start saving or investing is enough to get going. 

  4. Boost your income. Talk to your boss about whether a raise might be on the horizon. And if not, what you can do to get it there. Another option: pick up a side hustle on your off hours. (Psst...we Skimm’d how to make a side gig and main gig work together.)


Your net worth is the key to understanding your overall financial picture. And building it up is the way to reach all your big money goals.

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