New Year Goals: How to Spruce Up your Net Worth in 2019
Have you checked your net worth lately? Is it what you want it to be or does it need a little spit-shining? Yes, you might have a fat savings account, a sizeable retirement fund, and a rich investment portfolio, but your net worth can truly tell how successful you are.
If you are looking to bolster your net worth, here are six simple yet effective ways to do so.
Set a Budget
Impulse or impromptu purchases are a sure-fire killer of your net worth. Do you find yourself spending on trivial things you didn’t plan for? That’s exactly why you need a budget. Set a weekly, monthly or quarterly budget to stay on top of your personal finances. The biggest draw of using a budget is that you’ll be able to cut out unnecessary expenses as well as effectively build up an emergency fund, savings account, and retirement account.
Take a Close Look at your Assets
Your assets are the biggest contributor to your net worth. The problem is that you might not know their exact worth. First, review your primary residence, which is most probably a family home, condo or villa. The more equity you have in your home, the bigger your net worth.
The other assets you need to review include your secondary residences, investments (bonds, retirement plans, stocks, mutual funds, securities, etc), and collectibles (such as antiques, rare coins, art, and so forth). The trick is to appraise these assets based on their actual market values.
Review Your Liabilities
It also pays to take an incisive look at your liabilities. This is what you owe others, including mortgage/ home loan, car loan, credit card debt, personal loans, and so forth. The next sensible step is to find ways to dial down your liabilities.
Reduce your Debt
It’s simple: pay off your debt, whether it’s a mortgage, small business loan, mobile loan, credit card debt, or car loan. Accelerate the repayment of these debts by using handy tips and tools like making larger monthly repayments, loan consolidation to reduce interests, etc,
Thin Out your Expenses
The more you spend each month, the slower it will be to build up your net worth. Take a second look at your budget, are there any expenses you can cut back. For instance, if you spend 15% on food and household supplies, you might want to reduce at least 3% of nonessentials.
Check Annual Costs
Annual expenses like life insurance, car insurance, healthcare coverage, and can make or break your net worth. Consider ditching your current insurer or switching to a smaller car that’s cheaper to insure.