The year is 2018 and Jeff Bezos, founder and CEO of Amazon, tops Forbes list of wealthiest people with a net worth of $158.8 billion. Next on the list, we have Bill Gates, founder of Microsoft, with a net worth of $95.7 billion. Rounding out the top three is Warren Buffett, investment champion and CEO of Berkshire Hathaway, with a net worth of $87 billion. The year is 2018, what is your net worth? Have you ever calculated your net worth? Do you even know what net worth is?

Investopedia defines net worth as, “a concept applicable to individuals and businesses as a key measure of how much an entity is worth.” More simply put, net worth is the monetary value of something or someone. To calculate one’s net worth you must first add up everything a person owns (their assets), add up all of the debts they owe (their liabilities), and calculate the difference between the two. Any time you applied for a mortgage, car loan, or something similar you would have gone through this process with the lender. At the end of this post, I have included a link so that you can calculate your net worth. If you are not satisfied with your current net worth, below you will find suggestions for either increasing your assets or lowering your liabilities. Both of these will result in a higher net worth. When I was working to pay off college debt, I made a spreadsheet of all of my liabilities and assets and every couple of months I would recalculate my net worth. Seeing that number change in the positive direction was a great motivator to keep me on the right path.

Increase Your Assets

An asset is anything you own of value. This can include stocks, bonds, collectibles, real estate or something as simple as the money in your bank account. Increasing your assets, even if you are not able to pay down any debts, will result in an increased net worth. For this section, I will focus on the assets most people own.

1. Increase bank account balances

Around seven percent of Americans do not have any type of bank account. For the 93 percent that do have an account, the majority of them struggle to keep a balance over $1,000. When it comes to growing your balance, every little bit helps. Even depositing $10 a pay period is better than depositing nothing. If you do not already have a savings account, start one. It does not even need to be at the same bank where you have your checking account. Several online banks offer accounts with no fees, no minimum balance requirement, and an interest rate that is much higher than a traditional commercial bank. (My husband and I have accounts with Ally and Capital One.) Once you open your bank account, you now have to find money to deposit. Here are some things to consider:

* Increase your cash inflow (your salary). Ask for a raise, get a higher paying job, work extra hours, get a second job–just do something that results in you having more wages to deposit.

* Liquidate your assets. Do you have anything worth selling? Take that instrument you never learned how to play to the nearest pawnshop. List that designer outfit that no longer fits on Poshmark. Sell that Harley to your neighbor that has suddenly become a motorcycle enthusiast. (This may just be trading one asset for another, but the point of this is getting more cash, which could help you with some of the other suggestions in this post.)

* Decrease your cash outflows (expenses) so you have more money to save. One area where many of us overspend is our food category. Do you dine out a lot? Buy coffee rather than brew it at home? Even just changing where you do your grocery shopping can make a huge difference. (A shopping trip to BBs will change your life.) I was listening to WFMZ this morning and they quoted a recent study that says the average American spends $450 each month on impulse purchases. Consider using the envelope system for categories that may be a hard one for you to curtail spending.

2. Increase the value of real estate you own

They say “a man’s home is his castle.” It should be a safe haven and a place to relax after a long day. For most people, a home will be their most valuable asset. Do an assessment of your home. How can you make it fit for a king or queen? It could be something as simple as painting the living room or giving it more curb appeal. Be careful not to select projects that will cost more than they are worth.

Decrease Your Liabilities

A liability is any money you owe. This could be a student loan, car loan, personal loan, or mortgage. Whatever debt you have, it is important to get rid of it. Remember Proverbs 22:7 (NIV), “The rich rules over the poor, and the borrower is a slave of the lender.” Your debt will not disappear overnight, but you can start lessening it by following one or more of my suggestions below.

3. Lower your interest rates.

Have you ever called the companies you owe money and asked them to lower your interest rate? Many creditors are open to negotiations. When your interest rate is lowered, you will owe and pay less money overall.

4. Pay down your debt

Decreasing your debt may seem like an impossible task, but any amount above the required minimum payment required can help pay down your debt faster. It will also make it so you pay less in interest. For example, paying $100 more per month on your mortgage can help you pay off your mortgage 81 months sooner. That is a huge savings! Paying more than the minimum payment required on a credit card can have a similar effect.

5. Don’t generate more debt

Before acquiring additional debt, ask yourself if you really need it. New cell phones, new cars, new clothes are all temptations that can add thousands of dollars of debt. Remember this quote from Neal A. Maxwell, “Never give up what you want most for what you want today.” Also, remember that every time you rack up new debt, you decrease your net worth. One of my favorite Bible verses about debt relates to this very topic, “For which of you, desiring to build a tower, does not first sit down and count the cost, whether he has enough to complete it?” (Luke 14:28).

Your Net Worth

Your net worth will be used throughout your financial life to determine your overall financial health. We may be priceless in the eyes of our Heavenly Father, but financial institutions do not see it that way. When your net worth is higher, it can make you feel better about your overall financial situation and this alone can have a positive effect on other areas of your life. If you are interested in getting this and other areas of your finances in order then register for Financial Peace University, which begins in September. GT also offers Financial Coaching for couples or singles seeking one-on-one help with their finances. Visit the HUB for more information about both of these invaluable programs. Fall is almost here. Make this the season you get your financial life in order. Trust me, it is WORTH IT.

Helpful Links

Net worth calculator:
Envelope system explanation: