BUSINESS MATTERS
* Pay down debt. Reducing debt makes a big impact on your net worth. Pay down high-interest credit cards or loans to keep debt from increasing and avoid using credit. Pay more than monthly minimums whenever you can.
* Earn more. Consider seeking higher paying work, increasing your hours or getting a side hustle to boost your earnings. The Hills also sold items they didn't need online for extra cash.
Above all, be flexible when life events interfere with your plan.
"It's OK to adjust your budget throughout the year or as changes happen," said Daniel Kellogg, CFP, a financial planning income specialist with Personal Capital. "Building good savings habits, both in the short run with an emergency fund and the long run with retirement savings, helps make your budget more resilient and adaptable."
was enough financial security so that Nicole could raise their children at home. As their kids grew older, new goals emerged. But what they achieved is something everyone can learn from: They grew their net worth from negative $50,000 to a million dollars in 10 years.
Figuring out your net worth
To determine your net worth, you need to add up your cash, savings and checking accounts, investments and retirement accounts, plus significant assets such as your home. Then subtract debts: home mortgage, car loans, student loans, credit card debt, etc. The remaining figure is your net worth. Sound challenging? There are some great free tools available to help you accurately track your net worth to the penny and continue to track it over time as your financial situation evolves. Personal Capital's financial dashboard features a Net Worth Calculator that allows you to calculate and track your net worth over time.
Tips for building net worth
The Hills followed sound financial practices - spending less, saving more - to build their net worth. Start with these simple steps:
* Figure out where your money goes. Track monthly income and expenses, to see what you're earning and spending. Determine which expenses are essential, and where you can trim. Short-term sacrifices can help you achieve long-term goals.
"There are some great free tools available
to help you accurately track your net worth
to the penny and continue to track it
over time as your financial situation evolves."