Top 7 ways to boost your net worth

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How to Determine Your Financial Net Worth

Your net worth is one indication of your financial well-being. It's the value of your assets after subtracting your liabilities. While you might know what your favorite celebrity is worth, you might not have a clue as to your own net worth. Increasing your net worth can be a good financial goal to strive toward. Need some assistance? Check out these seven ways to get started.

net worth 1 Top 7 Ways to Boost Your Net Worth

Find out now: How much do I need to save for retirement?

1. Calculate Your Net Worth

Before you can raise your net worth, it helps to know where you stand now. To find your net worth, you'll need to add up your assets. Your assets include things like the amount of money in your investment, savings and retirement accounts, the market value of your home, your car and other property you own, plus the money you have in your checking account.

Next, add up your liabilities. You'll need to include what's left of your student loan debt, your mortgage and your personal loan debt. Don't forget about your credit card debt and your medical debt. Then you'll be able to calculate your net worth, which is equal to your assets minus your liabilities.

2. Focus on Eliminating Debt

If you're not happy with where your net worth currently stands (if you have a lot of debt it might currently be negative), one way to bump it up is to reduce your debts. There are many different debt payoff strategies that you can implement. You can get rid of the debt with the highest interest rate first or consolidate your debt.

Playing around with a calculator can show you how long it'll take you to eliminate your debt. For example, if credit card debt is one of your biggest burdens, you can use a credit card calculator to see how chipping in a little extra will make a big difference in the long run.

3. Find Ways to Cut Back

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Anyone who's serious about getting out of debt and saving more will need to start spending less. You don't necessarily have to give up everything, but something is probably going to have to go. Substituting an expensive pastime for one that's cheaper and splurging on just one or two things at a time can make it easier to stick to your budget and achieve your financial goals.

4. Fill Your Retirement Accounts

Part of your net worth depends on how much you've saved for retirement. So taking the money you would have spent on a day trip or a new gadget and sticking it into your 401(k) or your IRA is another way to increase your net worth. The government sets contribution limits each year, so it can be a good idea to try to get as close to those limits as you can. For example, for tax years 2015 and 2016, you can contribute up to $18,000 in your 401(k) if you're under 50.

Check out our 401(k) calculator.

5. Mind the Mortgage

If you're a homeowner, you can increase your net worth by building equity. Your home equity is the percentage of your home that you own. You can set up a plan to pay off your mortgage faster in order to increase your equity. You can do this by paying more each month, or making an additional payment each year. It's important to make sure your mortgage doesn't have a prepayment penalty before you start paying extra.

6. Try to Lower Your Interest Rates

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When you first took out your student loans, your credit might not have been that great. If you've kept up with your monthly payments over the years, however, you might be able to qualify for a better interest rate. Contacting your lender to see whether you can refinance those loans and your other debts might be a good idea. If you can reduce the interest rate you're paying, you'll pay less over time and more quickly boost your net worth.

7. Adjust Your Tax Withholdings

It might feel good to get a huge tax refund check in the spring. But you could be doing yourself a disservice by paying more taxes than you need to each pay period. If your net worth needs a boost, changing the number of allowances you're claiming can put a little extra money in your pocket to put towards other things (retirement, paying down your mortgage, etc.).

To adjust the amount of tax that's being withheld from your paychecks, you'll need to fill out another W-4 form. The more allowances you claim, the less income tax you'll have withdrawn from your pay. So if you're single and you only have one job and zero dependents, claiming two allowances instead of one will increase your take-home pay. Just be sure not to claim too many allowances, or you could end up owing the IRS some money come tax time.

Related Article: A Guide to Filling out Your W-4 Form

Related: The 15 best cities for saving money


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The 15 Best Cities for Saving Money (Unlisted)
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Top 7 ways to boost your net worth

15. Garland, Texas

  • Population: 235,501
  • Median income: $51,997
  • Unemployment rate: 3.7%
  • Median home listing price: $160,000
  • Median monthly rent: $1,350
  • Average gas price: $1.678
  • Average cost of groceries: $36.77
  • Sales tax: 8.25%

This suburb of Dallas is more affordable than its much larger neighbor, which is in the No. 49 spot in this ranking. Although the median income in Garland is slightly below the national median income of $53,482, housing costs are relatively low. Plus, Texas is one of seven states that doesn’t have an income tax, so residents can keep more of their paycheck and stash it in a savings account.

Photo credit: Andrei Tudoran/Shutterstock.com

14. Colorado Springs, Colo.

  • Population: 445,830
  • Median income: $54,228
  • Unemployment rate: 4%
  • Median home listing price: $269,900
  • Median monthly rent: $1,325
  • Average gas price: $1.704
  • Average cost of groceries: $29.41
  • Sales tax: 7.63%

Colorado Springs ranks as one of the best places for outdoor lovers, but it’s also a great place for savers. Just 60 miles south of Denver, Colorado Springs offers a more affordable alternative to Colorado’s capital, which is 69th on GOBankingRates' list of the best places for saving money. The median home list price and median rent in Denver are more than 35 percent higher than in Colorado Springs. That means residents of Colorado Springs have more room in their budgets to save.

Photo credit: photo.ua/Shutterstock.com

13. Oklahoma Cita, Okla.

  • Population: 620,602
  • Median income: $47,004
  • Unemployment rate: 3.3%
  • Median home listing price: $195,000
  • Median monthly rent: $1,195
  • Average gas price: $1.687
  • Average cost of groceries: $33.99
  • Sales tax: 8.38%

Even though Oklahoma City is the largest city in Oklahoma — and the capital — it doesn’t have a big-city price tag. Relatively low housing, gas and grocery costs leave residents more room in their budgets to save.

Photo credit: Henryk Sadura/Shutterstock.com

12. Austin, Texas

  • Population: 912,791
  • Median income: $55,216
  • Unemployment rate: 3.1%
  • Median home listing price: $359,000
  • Median monthly rent: $1,480
  • Average gas price: $1.557
  • Average cost of groceries: $30.91
  • Sales tax: 8.25%

The capital of Texas is known for its live music scene, trendsetting restaurants and South by Southwest festival. But Austin isn’t just a place for music lovers, foodies and techies — it’s a great place for savers. Gas and grocery costs are low, and housing costs are manageable in a city with a median income that tops the national median income.

Photo credit: iStock.com/David Sucsy

11. Arlington, Texas

  • Population: 383,204
  • Median income: $53,055
  • Unemployment rate: 3.7%
  • Median home listing price: $186,560
  • Median monthly rent: $1,395
  • Average gas price: $1.655
  • Average cost of groceries: $33.35
  • Sales tax: 8%

This city makes GOBankingRates' list of best places for savers for the second year in a row. Arlington is another Dallas suburb that’s more affordable than its bigger neighbor. Its relatively low housing costs and daily expenses along with a median income that’s on par with the national median income give the city’s residents a better ability to save.

Photo credit: iStock.com/Aneese

10. Tulsa, Okla.

  • Population: 399,682
  • Median income: $41,957
  • Unemployment rate: 3.9%
  • Median home listing price: $136,900
  • Median monthly rent: $975
  • Average gas price: $1.627
  • Average cost of groceries: $32.31
  • Sales tax: 8.52%

Like Oklahoma City, the state’s second-largest city is a great place for savers. Although the median income in Oklahoma City is higher, lower housing costs in Tulsa offset the difference and land it higher in this ranking.

Photo credit: iStock.com/Davel5957

9. Omaha, Neb.

  • Population: 446,599
  • Median income: $48,751
  • Unemployment rate: 3%
  • Median home listing price: $169,700
  • Median monthly rent: $1,100
  • Average gas price: $1.841
  • Average cost of groceries: $33
  • Sales tax: 7%

Notoriously frugal billionaire Warren Buffett lives in this Midwestern city that ranks as one of the most affordable places to live. It has the lowest unemployment rate on this list. Despite low housing costs, the median income is relatively low, which is why Omaha doesn’t rank higher on this list of best places for savers.

Photo credit: iStock.com/DenisTangneyJr

8. Fort Wayne, Ind.

  • Population: 258,522
  • Median income: $43,994
  • Unemployment rate: 4.4%
  • Median home listing price: $97,900
  • Median monthly rent: $650
  • Average gas price: $1.827
  • Average cost of groceries: $31.64
  • Sales tax: 7%

Fort Wayne returns to the No. 8 spot in GOBankingRates' ranking, the same spot it earned in 2015. It has the cheapest median rent and cheapest median home list price among the best cities for savers. However, a relatively low median income leaves residents with less to save and prevents this city in northeastern Indiana from ranking higher.

Photo credit: iStock.com/Davel5957

7. San Antonio, Texas

  • Population: 1,436,697
  • Median income: $46,317
  • Unemployment rate: 3.5%
  • Median home listing price: $229,000
  • Median monthly rent: $1,136
  • Average gas price: $1.527
  • Average cost of groceries: $31.02
  • Sales tax: 8.25%

Although bigger than Austin and Dallas, San Antonio boasts a lower cost of living, which means residents can afford to stash more in savings. You can even soak up the culture of this city for free by strolling along the top tourist destination in Texas — the San Antonio River Walk.

Read: 35 Secrets to Saving Money in 2016

Photo credit: iStock.com/H 1photo

6. Virginia Beach, Va.

  • Population: 450,980
  • Median income: $67,001
  • Unemployment rate: 4.5%
  • Median home listing price: $264,900
  • Median monthly rent: $1,600
  • Average gas price: $1.552
  • Average cost of groceries: $32.24
  • Sales tax: 6%

Virginia Beach has the lowest sales tax among the top 15 best cities for savers. Housing, grocery and gas costs also are relatively low in this city on the Atlantic Coast. Plus, a median income that’s well above the national median income helps make it easier to save in Virginia Beach than in many other cities.

Photo credit: iStock.com/Imagesbybarbara

5. Chandler, Ariz.

  • Population: 254,276
  • Median income: $72,072
  • Unemployment rate: 4.7%
  • Median home listing price: $310,990
  • Median monthly rent: $1,495
  • Average gas price: $1.497
  • Average cost of groceries: $34.67
  • Sales tax: 7.8%

Housing costs in this suburb of Phoenix are actually higher than its much larger neighbor. But the median income is more than $25,000 higher in Chandler than in Phoenix, which ranks 31st on GOBankingRates' list. Higher wages help offset slightly higher housing costs, giving residents more ability to save in this city that has a strong high-tech employment base.

Photo credit: iStock.com/ubu-ibmee

4. Kansas City, Mo.

  • Population: 470,800
  • Median income: $45,376
  • Unemployment rate: 3.8%
  • Median home listing price: $134,900
  • Median monthly rent: $825
  • Average gas price: $1.689
  • Average cost of groceries: $31.98
  • Sales tax: 8.35%

Kansas City is known for its barbecue and jazz, but it also offers affordable living. Fort Wayne, Ind., is the only place among the top 15 best cities for savers that boasts lower median rent and home list prices than Kansas City. But Kansas City’s median income is higher, giving its residents a better ability to stash more in savings.

Photo credit: iStock.com/Davel5957

3. Lubbock, Texas

  • Population: 243,839
  • Median income: $44,139
  • Unemployment rate: 3.1%
  • Median home listing price: $179,500
  • Median monthly rent: $1,050
  • Average gas price: $1.603
  • Average cost of groceries: $28.34
  • Sales tax: 8.25%

Home to Texas Tech University, Lubbock is called the Hub of the Plains. Although the median income level is lower than the national median income, the unemployment rate is low, as are housing costs. An affordable cost of living makes it easier to save in Lubbock.

Photo credit: iStock.com/DenisTangneyJr

2. Plano, Texas

  • Population: 278,480
  • Median income: $82,944
  • Unemployment rate: 3.7%
  • Median home listing price: $320,000
  • Median monthly rent: $1,895
  • Average gas price: $1.678
  • Average cost of groceries: $32.28
  • Sales tax: 8.25%

Plano is a better city for savers than some of the better-known Texas cities on this list. Although Plano has the second-highest median home list price and highest median rent among the top 15 best cities for savers, it also has the highest median income, which means its residents have more to set aside in savings. With several major corporations headquartered in Plano, it’s been named America’s No. 1 city to find a job and the third hardest working city in America by Money Magazine.

Photo credit: iStock.com/olddays

1. Gilbert, Ariz.

  • Population: 239,277
  • Median income: $81,485
  • Unemployment rate: 4.7% (phoenix metro area)
  • Median home listing price: $300,000
  • Median monthly rent: $1,400
  • Average gas price: $1.497
  • Average cost of groceries: $34.67
  • Sales tax: 7.8%

Once known as the Hay Capital of the World, Gilbert is now a booming suburb of Phoenix with one of the highest median incomes in the state of Arizona. In fact, nearly 34 percent of the city’s population is characterized as “boomburbs” with a median household income of $105,000, according Gilbert economic development data.

Although housing costs are higher in Gilbert than in many of the other best cities for savers, they’re not the highest. And the high income there helps propel Gilbert to the top of this list.

Photo credit: iStock.com/Bob Balestri

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The Bottom Line

While you might be a long way off from having a million-dollar net worth you can gradually raise your net worth if you can put your energy into saving more, increasing your cash flow and knocking out debt.

Photo credit: ©iStock.com/Ridvan Celik, ©iStock.com/wdstock, ©iStock.com/AndreyPopov

The post Top 7 Ways to Boost Your Net Worth appeared first on SmartAsset Blog.

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