ways to increase net worth

New to the Live Richer Challenge: Net Worth Edition? Learn more about it HERE.

Week 2: Increasing Your Net Worth

This Week’s Goal: To learn actionable ways to grow your net worth by increasing your salary, pursuing entrepreneurship, paying off debt, and more.

Today’s Easy Financial Task:  Learn the fundamental steps necessary to increase your net worth.

How to rock this task:

 

Welcome to another full week of tasks about growing your net worth.

Week 1 was all about fostering a Wealthy Mindset.

You wrote down goals for increasing your net worth. We also talked about what your net worth actually is to clear up any confusion.

Then we touched on the mindset you need to have to become financially free.

This week, I’m going to lay out some steps you can take to increase your net worth.

I’m not going to lie, you have a lot to do today, but if you want to achieve your financial goals, it’s going to take effort.

If you’re willing to do the work, I’m here to help you each step of the way.

Let’s do this!

 

How to Increase Your Net Worth

Let’s remember the simple equation that we use to calculate our net worth:

 

Assets – Liabilities = Net Worth

Based on that equation, there are two ways to increase your net worth:

  1. Increase your assets (items of value that you own, i.e., cash, investments, etc.)
  2. Decrease your liabilities (money that you owe and debt)

 

At a very basic level, to increase your assets and reduce your debts you must:

  • Establish a budget. A budget gives your money a purpose. A budget can help you curb excess spending, so you have more money to repay debt, to save, and to invest in assets. These are all things that grow your net worth!
  • Earn more money. Ultimately, being extremely frugal is not always the best answer to building your net worth. Bringing in more income may be necessary to attain financial freedom.

 

Today, we’re going to focus on getting control of your current finances via a budget, a debt repayment plan, and an emergency savings plan.

Then, the rest of the week I’ll provide specific ways that you can make more money.

Woot Woot!

Ready? Great!

I have a bunch of great resources that will knock your socks off, put money in your savings account, and help you destroy debt — in that order!

 

Meet Your New Bestie – The Budget

A budget is the backbone of your financial strategy.

Think of a budget as the root system in the soil that helps a flower bloom. A budget is an anchor that keeps your overall financial plan in place.

If you don’t yet have a budget, learn how to create one here. It’s the first chapter of my best-selling book, The One Week Budget. It’s my gift to you. 😊

Here’s a blank budget template I created for you called the My Money List. Use chapter one of my book to help fill your own My Money List out.  

 

How to Eliminate Debt Like a Pro

Moving on to debt. I used a system called the Debt Snowball method to crush debt.

Here’s how to implement the snowball method in 8 steps:

  1. List all of your debts in order from smallest current balance to largest current balance. You can use the Debt List worksheet to create your list.
  2. Figure out how much money you can squeeze from your budget to repay debt.
  3. Make the minimum payment on all of your debt with the exception of the debt with the lowest balance that you have at the top of your list.
  4. Automate all of your minimum payments.
  5. Put all excess money you can squeeze from your budget to the first debt with the lowest balance on your list. (I suggest paying the lowest debt off first because early success will trigger an emotion in you to keep motivated.)
  6. After the first debt is paid off, apply all of the money you were putting towards your first debt to your second debt.
  7. Give your debt plan a TURBO BOOST whenever you can by putting any unexpected money (tax refunds, bonuses, commission, etc.) to the debt.
  8. Keep the same system going until you’re debt free. Yippee!!!


Remember, grab the My Debt List template here to help you complete this debt task.

 

Let’s Talk About Those Student Loans… Yikes!

If you’re dealing with student loans, my good friend Angela Howze is a Financial Aid expert and was a guest on my podcast, Brown Ambition, with me and my co-host Mandi.

Angela is a BOSS when it comes to student loans and helped me get rid of over $17,000 in student loan debt!

Listen to our Student Loan Debt Show featuring Angela HERE.

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In this episode we talk about:

  • Catching up on student loan payments when you’re behind
  • Qualifying for Public Service Loan Forgiveness
  • Paying for grad school
  • How I REALLY got my federal student loan forgiven
  • And more!

 

What About Saving?

We talked a lot about debt today.

I want to close out today’s task by stressing that saving while you pay off debt is highly important. You should be putting away some coins in savings because you’ll need to rely on them whenever you’re in a pinch.

The best thing you can do is start saving somewhere with what you have. The amount will blossom and grow as you stay consistent. Use your new budget aka Money List to help you save.

I also have some fabulous savings tips to share from Tara Jones of Your Pretty Pennies.

Here’s how to boost your savings:

  • Separate your money – Have multiple accounts to keep your money divided up. Tara uses a money market account for her emergency savings. She has a checking account where her direct deposit goes for basic debit transactions. She has an employer retirement plan as well. It’s important that you don’t have your emergency savings or retirement savings sitting in your regular ol’ checking account where you can spend it freely.
  • Save your tax refund – It’s tax season! Your tax refund can be a great starting point for savings.
  • Get support – Making a change is always less fun when you’re doing it alone. That’s why we have the Dream Catcher: LIVE RICHER Forum! Reach out to others in the forum for support and encouragement while you’re saving. Having support can give you crazy amounts of motivation!

 

Not sure how much you need to have saved?

NerdWallet has an awesome and completely free tool to help you calculate how much your emergency savings should be.

Check out the calculator HERE.

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Still think you don’t have the discipline to save? There’s an app for that. Try Digit.

Each week, Digit automatically analyze your account and look for the money you’ve kept in Digit for 3 months. You get 5 cents for every $100, every 3 months for as long as you keep saving.

It literally takes less than 5 minutes to get started with Digit.

 

I know you have 5 minutes. Don’t wait, click here to begin saving:  http://thebudgetnistablog.com/digit

FYI:  Digit is free for the first 100 days, then there’s a $2.99/month fee.

 

What’s Your Next Step?

Today’s tasks are meant to help you build a framework to increase your net worth.

The strategy behind building our wealth must include these basic steps:

  • Creating a budget
  • Creating a debt repayment plan
  • Growing your emergency savings

 

If you have any questions about today’s tasks, be sure to hit the comments below.

Share what you’re working on with your accountability partner(s) as well.

Keep in mind, accountability means that you share actions you’re planning on taking with each other and then follow up to make sure things are gettin’ done!

Is your partner doing what they said they’re going to do?

Encourage them!

 

Share what you’ve learned today with your tweeps:

Woohooo! Today, I created a budget, debt repayment plan, and an emergency savings plan. Day 8:… Click To Tweet

 

Live richer,

Tiffany

 

You can reach out to me here:

Twitter: @thebudgetnista

Instagram: @thebudgetnista

Facebook: The Budgetnista

Private Forum: Dream Catchers: LIVE RICHER

P.S. Don’t forget to get your free Live Richer Challenge: Net Worth Edition Starter Kit. GET IT HERE.

P.P.S. Here’s a copy of the Challenge Calendar. It’s a fun way to keep track of your progress.

LRC Net Worth Calendar

 

Want to work through the Live Richer Challenge: Net Worth Edition in a workbook? It’s part of a bestselling series!

Click the link below and get your copy.

My Lisa Rule: I have 4 sisters and Lisa is the baby (well she’s not a baby anymore). Of all of my sisters, I’m the most protective of her. Before I share any product or service with you, it must pass my Lisa Rule.

What’s the Lisa Rule? If I would not advise Lisa to use a product or service, I won’t advise you to. YOU are my Lisas. I feel protective of you and your financial journey.

Digit passes my Lisa Rule. Yes, I am an affiliate of Digit, and I earn a commission off of referrals, but I would not recommend a product or service that I didn’t believe was helpful and useful.

  • Jamie Cheatwood

    Omg, that podcast was just amazing and informative!!!! You’ve really got me thinking about joining the academy to keep learning!!!

    • Thank you! I look forward to having you as a Dream Builder (Academy member) when you’re ready. 🙂

  • Jamie Cheatwood

    Would it be better to go back and do the other challenges (once this one is complete) that are free (if so, can anyone tell me how to find them on the site lol) or just go ahead and join the academy? Thoughts?

    • It’s up to you Jamie, I gve foundational financial information away for free via the Challenges.

      The Academy is when you’re ready to go to the next level with your finances. It’s more than money maintenance, it’s wealth building.

      You can find the other free Challenges here @Ja@jamiecheatwood:disqus . Only do one at a time or you’ll get overwhelmed. 😉

      http://www.livericherchallenge.com/signup/

  • Beverly Jones

    Although my student loans are in the PSLF Program NOW! (2017) I’ve learned five years could have been shaved off had I known just like Tiffany this program existed. We live, we learn. I’m in a better financial mind set since joining The Budgetnista in 2016. Not saying coulda, woulda, shudda anymore, moving head on this financial freedom journey.

    • Right?! I groan, but you know what? I know better so I’m doing better. now. 🙂

      • Beverly Jones

        Exactly! 🙂

  • Jamie Cheatwood

    Btw, I’m now addicted to your podcasts lol

  • Danielle Anderson

    Loved the podcast! However, in regards to paying off student loans, the only info provided was for those who are teachers and those who work government jobs. Is there any info that can be provided for those who aren’t teachers or work government jobs?

    • Student loan Forgiveness is only granted to folks like that, buuuuut you could start a non-profit and qualify yourself.

      • Danielle Anderson

        Thank you!

  • Lee Hernandez

    So all weekend i’ve been creating my money list and I think i got it but aside from my monthly take home pay, when I started to work Nov 2016 I had a 1500 balance in my account so I’ve always carried a balance to my monthly take home pay. For example I have 900 in my checking do I add that to my Jan monthly take home? or not? It was draining task but worth it thank you!

  • Monica W.

    I still have my Money List from a previous challenge! Come thru Tiffany!

  • gm roberts

    Only debt I need to repay is student loans. Need to develop a strategy. Will contact Angela again after I do some research on my own abut refinancing (for a lower rate), consolidating federal subsidized an unsubsidized loans and lump sum payment discount. I called Fedloan about paying on the principal and paying a lump sum for a discount and the counselor said it was not possible. Have to do research on my own to maximize my 20 minute paid consultation. Watching my dollars 🙂

  • Charmaine Glover

    My mission is to start the $500 and take it from there. I feel inspired right now.

  • Keyasha

    Living via Budget is so hard I’m always overspending on food in th grocery or at a restaurant and I shop a lot and drive a pretty large distance everyday. I often wish there was a formula and then I could try to figure it out.

    • Yes, budgeting does require some work, but it’s sooo worth it. Push through @@disqus_3eN2MXRc0o:disqus . What’s on the other side is freedom.

  • Sherria Garnett

    I still working on my budget. I think I have to take a step back to last week. I have put money into a flex spending plan through my company for medical bills. Where do I include it? However, it’s all gone by October. Please help.

    Assets/ Liabilities. How do I budget for this.

  • Robyn Golden

    I work for govt. the USPS. Does this qualify for any debt forgiveness on student loans? I have $34k in loans I would like to get rid of.

  • Starr Pack

    Thank you for the One Week Budget document. Great information. I have my budget… This is my second year using one. So the budget is all set. As for debt. I only have two. My student loan which is currently in forbearance and my car loan. My student loan has been in forbearance from the time I had to start paying it back years ago. I guess it’s time to really face the fire and pay it back. I will give the snowball method a try but because I owe so much to my student loan it will be a looooog time before I can double up on the second debt. I wish I could use digit but they do not work with my bank. Makes me sad because I really prefer digit over quapital. Oh well! Like Tara, I opened a money market account last year to save for an emergency fund. I failed. 1 dollar has been sitting in that account for the longest with no activity…but that’s going to change. My 401k is in a separate account as well as having a separate joint checking with my husband for everyday needs. My goal is to save 8 thousand in that money market account by doing a money challenge and getting money from my budget.

  • megan davis

    Thanks so much for this valuable information! I’d like to know what I should do with my tax return if I already have a starter savings? Should I save it all to increase the savings or begin the snowball method to pay down my debt? I’m thinking the latter.

  • Nicole Garris

    I learned so much today. If you have loans and you set up income base payment plans 5 years ago and they had you on the $0 payment plan that counted against you loan forgiveness. A lot of insight that I wish I had 10 years ago.
    All I can do now is pass on the knowledge.

  • Diaminique Goodwin

    I really need to find an accountability partner.

  • Deborah Ivey

    I’m going to apply to snowball method to get down my debt.

  • t Baby w

    Angela Howze!!!! WAS A BLESSING!!!!!!! Worth paying that $65 for a consultation!

  • Jeanette

    Budget and Debt Repayment Plan established. Now to work on determining the amount of my emergency fund and getting it started. Ready to Go!!!

  • Lisa

    Love the portion on Student loans forgiveness. This is my major debt, small debt under 2,000 will pay off in a couple of months.

    • Ford power

      Hello Lisa i want to recommend globaltechnologies46 at G mail dot com to you, he helped me cleared all my debt, remove all negative items from my report and also improve my score to a higher level. Tell him i referred you

  • Toshi Stokes

    Thank you for sharing! I will use all of these tips to increase my NETWORTH! ..and I LOVE Tara Jones, YOUR PRETTY PENNIES! Just one more confirmation that I am learning from the right people!

  • Monica Merritt

    Hi! Im on SSD, do I save in the same way?

  • Ford power

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