7 Best Ways To Increase Your Net Worth

Building your net worth is about more than bragging rights — it’s about freedom. A higher net worth can shave years off your retirement timeline and give you the kind of financial security that lets you stress less about money and focus more on what matters.

Growing your net worth doesn’t happen overnight, but it also doesn’t need to feel impossible. With the right strategies in place, you can steadily grow your net worth and move closer to your biggest financial goals. Here’s how to get started.

1. Boost your retirement contributions

Increasing retirement contributions is an excellent way to grow your net worth. However, people don’t often take full advantage of this strategy. In fact, 57 percent of working Americans say they’re behind on retirement savings, with 35 percent saying they feel significantly behind, according to a Bankrate retirement savings survey.

Contributing more to a retirement account, such as a 401(k), can benefit you in several ways:

• Tax-deferred growth helps your money compound faster.
• Many employers offer contribution matches (essentially free money).
• Employer matches can instantly double part of your contribution.
• Starting earlier maximizes compound interest over decades.

Beyond 401(k)s, you can also take advantage of individual retirement accounts (IRAs). While they don’t come with an employer match, they still offer valuable tax benefits. With a traditional IRA, your contributions may be tax-deductible and your money grows tax-deferred until withdrawal. With a Roth IRA, you contribute after-tax dollars but enjoy tax-free withdrawals in retirement.

Regardless of the account you use, the sooner you can start building your nest egg, the better. About 22 percent of U.S. adults say their biggest financial regret is not starting to save for retirement early enough, according to Bankrate’s recent financial regrets survey. To maximize the power of compound interest, give yourself as much time as possible to save, even if you have to start small in the beginning.

2. Trim your expenses

Reducing your expenses isn’t fun, but it can be a very effective way to increase your net worth. One way to reduce your expenses is to use a budgeting app. Focusing on the “big three” of housing, transportation and food can be a highly effective way to save money. Reducing your housing costs isn’t always an option, particularly if you have a family that is part of the equation.

However, reducing your transportation and food costs can be more realistic. For instance, buying food in bulk and eating out less often might save you hundreds of dollars a month.

3. Pay off high-interest debt

High-interest debt can severely limit your ability to increase your net worth. Unfortunately, credit card debt is a common part of many people’s financial lives. In fact, 46 percent of credit card holders currently carry debt from month to month, according to Bankrate’s credit card debt survey. Paying these balances down isn’t easy, but it’s a must if you want to increase your net worth.

If you have significant debt with interest rates higher than 10 percent annually, you don’t necessarily have to pay it off all at once. However, with credit cards, for example, paying just the minimum will ensure you stay in debt for years to come and pay thousands of dollars in interest.

Focus on paying whatever you can above the minimum payment. Doing so will reduce the interest you owe, which can lead to a domino effect. You can also use a method like the debt snowball or debt avalanche to pay off your debt.

4. Save for emergencies

An emergency fund won’t skyrocket your net worth on its own, but it helps protect it.

Unexpected expenses hit everyone — a broken refrigerator, a surprise medical bill or a car repair you can’t put off. In fact, 45 percent of Americans with credit card debt say it came from an unexpected or emergency expense, according to Bankrate’s credit card debt survey.

Without an emergency fund, those costs often end up on credit cards or personal loans, trapping you in a cycle of interest payments that eat away at your net worth. Having an emergency fund — experts recommend three to six months of living expenses in a savings account — helps you avoid that cycle.

Still, building a financial safety net isn’t always easy. To boost your financial cushion, consider setting up automatic deposits to your savings account so you practice the habit of “paying yourself first.” You can always start small, then increase your contributions over time.

Pro tip: Keep your emergency fund in a high-yield savings account where you can earn interest on your cash.

5. Renegotiate or consolidate loans

Renegotiating or consolidating your loans can save you a lot of money in the long run. You may have gotten stuck with a higher interest rate when you first took out the loan, perhaps because you had a lower credit score or no credit. But if you have been consistently making your payments on time and/or your credit score has improved, you might be able to refinance your loans for a lower rate.

Keep in mind that this isn’t always the best way to go. For instance, one way to refinance federal student loans is with a private lender. However, that could lead to giving up certain consumer protections or access to income-driven repayment plans, so refinancing may not be your best option in that case. Whether refinancing is right for you depends on your unique set of circumstances.

6. Keep your cars for as long as possible

For most Americans, driving is a daily necessity. But cars are money drains. They lose value fast, with Carfax data showing they shed more than 10 percent of their worth in the first month alone.

If you swap vehicles every few years, you’re constantly losing out to depreciation. The smarter move is to hold onto your cars longer and stretch their value. You may also pay more in taxes and insurance.

Eventually, though, every car hits a tipping point where repairs outweigh the savings. When you’re facing big-ticket fixes — like a transmission replacement — it may be a sign it’s time to move on.

7. Increase your salary

Boosting your salary isn’t always simple, but there’s a ceiling on how much you can cut costs and optimize your budget. Once you’ve tackled the other steps on this list, the most powerful way to grow your net worth is to increase your income.

But you don’t necessarily have to pick up a side hustle or even change jobs to increase your salary. The first thing you can do is ask for a promotion at your current job.

There are many ways to build a case for yourself when asking for a raise. You can cite specific wins you’ve had at your job over the past year. You can also research salary ranges for your job in the region where you live. Lastly, you can learn a new skill or earn industry certifications to further boost your value.

Still, promotions and raises aren’t always an option. Sometimes the fastest way to a bigger paycheck is switching jobs. Landing a higher-paying role, especially in a growing industry, can create the biggest jump in your net worth because it raises your baseline income for years to come. A new job with better pay and benefits not only improves your cash flow today — it compounds over time.

Bottom line

Increasing your net worth can seem challenging, but it doesn’t have to be. If you follow the steps mentioned here, you may find that saving money becomes easier than you expected. And when you calculate your net worth, that number could be far higher than you ever thought possible.

— Bob Haegele contributed to an earlier version of this story.