Categories: Business

Personal Finance Hacks To Increase Your Net Worth

Have you ever wondered how the financially savvy got their smarts? While some do have a natural affinity for being good with money, others have been able to piece together tips and tricks along the way to ultimately cultivate a lifestyle of healthy money habits.

Still, there is a difference between being good with money management and managing your money in a way that results in measurable and significant growth. Below we will discuss a few ways you can take your money game to the next level and work on increasing your net worth if even just little by little.

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Stop With The Status Quo

Too many people solicit a service or make a purchase, receive a bill, and simply pay it without question. While there are obvious times where this happens, and you have no room for negotiation there are others that you do.

The interesting thing is, often the bills that we can negotiate to be more in our favor are reoccurring ones. Things like monthly cell phone bills, cable, and even certain loan payments can all sometimes be re-worked to be more beneficial.

Student loans are a great example of this. With student loan debt being one of the most common and most significant, debts that a person will have, it is easy to just face the bottom of the mountain and say to yourself that you guess you’re going to be paying this off for the rest of your life and accept that fate.

While it is true that a loan this large will take time to repay, that isn’t a reason to settle. You can refinance student loans into a new loan as a way to reduce your monthly expenses. By creating a new loan, you will not only receive a lower interest rate, but a lower monthly payment as well.

The money that equals the difference between what you were paying and what your new payment is can be used for your ultimate goal of a higher net worth. If it is comfortable for you to do so, that money can be rolled into investments like a Roth IRA or high yield savings account. Giving yourself the opportunity to earn compound interest is what is going to increase your earnings most notably over time.

Find A Side Hustle

At this point the term side hustle is so trendy it’s almost lost its credibility. But the truth is, if you can find a way to boost your income in any way and use that money towards long-term savings goals, that will increase your net worth. You can find ways to make money online, use digital marketing to create passive streams of income, or wait tables a few nights a week or on weekends.

These are all perfectly viable options. The best part about a side hustle is that you can pick something that makes sense for your life and your availability. If you are a busy parent whose weekends are full of kid’s birthday parties and sports activities, then waiting tables on a Saturday probably doesn’t make sense and you should consider something that can be done from your home while your kids are at school or asleep.

One thing to beware of however is what is known as lifestyle creep. It can be tempting to elevate your lifestyle as your income increases but that defeats the entire purpose.

You are working this side hustle for money to spend in the future not money to spend right now. The cash you earn should be stringently planned for in advance and you should have habits in place that ensure that money is put into places where it can work and grow for you over time.

Invest In Life Insurance

Especially when you are young and healthy life insurance can seem like a waste of money. Often times people decide that they are going to skip this opportunity and just rely on personal savings for things like medical care, funeral expenses, and leaving an in heritance. While that strategy can work for some, it isn’t going to increase your net worth.

Depending on what type of policy you purchase you might be able to access those funds, tax-free, once the policy has reached a certain cash value.

Research the different types of life insurance that are available and speak to someone about why you are looking to make this purchase before signing on the dotted line. A financial advisor can help you make a choice that suits your specific goals as opposed to the insurance broker who may be only looking to make a sale and isn’t taking your game plan into consideration.

This might feel like a monthly strain right now to make the payments, but it will pay off in the long run. Find simple ways to cut back on expenses in order to support the policy. In some cases, it might be the difference of simply one or two less restaurant meals a month or doing your nails at home instead of the salon. Short term sacrifices for long term gains.