Increasing your net worth can have numerous benefits; it’s more than just bragging rights. For instance, lifting your net worth can help you retire years earlier. It also leads to financial security, which lets you worry less about money and more about the things that are important in life.

And while increasing your net worth might seem challenging, it doesn’t have to be. True, it will most likely take years rather than weeks, but putting the right systems in place isn’t overly difficult. Following some or all of these steps will allow you to increase your net worth and ultimately meet your financial goals.

1. Boost your retirement contributions

Increasing retirement contributions is an excellent way to grow your net worth; however, people don’t often take full advantage of this strategy. For instance, the 401(k) contribution limit for 2023 is $22,500. Additionally, individuals who are 50 years old or older are allowed to contribute an extra $7,500. If you have reduced your expenses as mentioned in the next step, you already have one way to increase your retirement contributions.

Contributing more to a retirement account can have a number of benefits. These accounts are often tax-deferred and many come with employer matching. At the very least, you should increase up to the limit of your employer’s match, if you aren’t already. This is an easy way to double your money. But thanks to the favorable tax treatment of retirement accounts, it’s usually a good idea to maximize your contribution to them before investing in other ways, such as with a taxable brokerage account.

2. Trim your expenses

Reducing your expenses isn’t always fun, but it can be a very effective way to increase your net worth. One way to reduce your expenses is to use budgeting software or an app. Focusing on the “big three” of housing, transportation and food can be a highly effective way to save money. Reducing your housing costs isn’t always an option, particularly if you have a family that is part of the equation.

However, reducing your transportation and food costs can be more realistic. For instance, buying food in bulk and eating out less often can save you hundreds of dollars a month.

3. Pay off high-interest debt

High-interest debt can severely limit your ability to increase your net worth. In fact, that is exactly the issue for millions of Americans, who collectively have more than $1 trillion in personal loans plus credit card debt. Paying these balances down isn’t easy, but it’s a must if you want to increase your net worth.

If you have significant debt with interest rates higher than 10 percent annually, you don’t necessarily have to pay it off all at once. However, with credit cards, for example, paying just the minimum will ensure you stay in debt for years to come and pay thousands of dollars in interest.

First, focus on paying whatever you can above the minimum payment. Doing so will reduce the interest you owe, which can lead to a domino effect. You can also use a method like the debt snowball or debt avalanche to pay off your debt.

4. Save for emergencies

Having an emergency fund can help you grow your net worth, albeit somewhat indirectly. For instance, you might build up $5,000 in an emergency fund over a few years, but it’s not that $5,000 increase to your net worth that makes the difference.

The biggest benefit is being able to avoid that high-interest debt mentioned earlier. You never know when you will have to replace your refrigerator or make an unexpected visit to the emergency room. Without an emergency fund, you could be forced to put these expenses on credit cards or take on other forms of high-interest debt.

That can lead to a vicious cycle of never-ending interest payments, putting a significant drag on your net worth. Having an emergency fund helps you avoid that cycle, which will help you increase your net worth.

5. Renegotiate/consolidate loans

Renegotiating or consolidating your loans can save you a lot of money in the long run. You may have gotten stuck with a higher interest rate when you first took out the loan, perhaps because you had bad credit or no credit. But if you have been consistently making your payments on time and/or your credit score has improved, you might be able to refinance your loans for a lower rate.

Keep in mind that this isn’t always the best way to go. For instance, one way to refinance federal student loans is with a private lender. However, that could lead to giving up certain consumer protections, so refinancing may not be your best option in that case. Whether refinancing is your best option depends on your unique set of circumstances.

6. Keep your cars for as long as possible

If you are like most Americans, you probably live in an area where driving is a daily necessity. Hence, owning a car is a must. But cars are a depreciating asset; you’ve probably heard that cars lose 10 percent of their value the moment you drive off the dealer’s lot. That could be an exaggeration, but it’s true that they tend to lose more than 10 percent of their value in their first month, according to data from Carfax.

In other words, if you buy new cars every few years, you are constantly at the mercy of rapid depreciation. Keeping cars longer helps you fight that cycle. Of course, all cars only have so much useful life. At a certain point, they become more expensive to maintain than the money you save by avoiding excessive depreciation.

It can be difficult to know exactly when that point is, but if you are making costly repairs like replacing the transmission, it might be time to consider a new vehicle.

7. Increase your salary

Increasing your salary is easier said than done, especially if the job market where you live isn’t the strongest. However, if you want to increase your net worth, there is only so much optimizing you can do with your finances. If you have already done everything else mentioned on this list, for example, increasing your earnings might be the best way to grow your net worth.

But you don’t necessarily have to pick up a side hustle or even change jobs to increase your salary. The first thing you can do is ask for a promotion at your current job, if that is a possibility. There are many ways to build a case for yourself; you can cite specific wins you’ve had at your job over the past year. You can also research salary ranges for your job in the region where you live. Lastly, you can learn a new skill or earn industry certifications to further boost your value.

Bottom line

Increasing your net worth can seem challenging, but it doesn’t have to be. If you follow the steps mentioned here, you may find that saving money becomes easier than you expected. And when you calculate your net worth, that number could be far higher than you ever thought possible.