Your net worth can tell you many things, but simply it is the yardstick by which you can gauge your own financial success. Many have calculated their net worth and come to the conclusion that it is in need of a little spit-shine, yet improving it can seem very difficult. However, it really only requires some guidance and a little willpower.

Pay off Your Debt
Money you owe is money that could be used to grow your net worth. Pay off all your debt as soon as you are able, but be aware of penalties that can be applied for early payment (like with mortgages).

Identify high-interest debt and target that first, paying off lesser debt along the way. Consolidating your debt by taking out a loan (at a lower rate) to pay down high-yield debt is a tried and true strategy. The bottom line here is to know what you owe and have a plan for paying it back. Make extra payments where possible and work to reduce your overall debt burden.

Max out Your Retirement Contributions
The government and many private employers provide retirement plans that have desirable tax characteristics (ex. a Roth IRA). In fact, many employers have matching programs that will help you to grow your contribution faster.

By not taking advantage of such programs, you are literally leaving money on the table. Retirement contributions create a two-fold benefit. They defer your taxable income to your lowest earning years and increase your available generative assets. Taking action now for your retirement will help slow one of the biggest impediments to growth of your net worth: taxes.

Cut Expenses by Realizing Expenses
Nobody likes to hear that they spend too much and need to cut back. We all know that eating out at restaurants or buying the latest smartphone eventually catches up with us, but what we don't realize is how quickly smaller expenses can add up. Make a habit of noting your expenses everyday for a week and you will be shocked by how much of your paycheck is trickling away. The intent is not to stop eating out entirely or to quit favorite pastimes but instead to simply become aware of your spending habits and identify areas where you can make adjustments; a little goes a long way. In addition, remember that debt from step one? A large bulk of that comes from credit cards. Cutting up your credit cards and using only the cash you have available will help to curb your spending.

Keep Money You Have Saved Where It Will Grow
You probably already have a savings account, but are you using it? Your checking account should be lean enough for your regular spending and no more, everything else should be in interest bearing accounts. Even better, invest what you can. Most people tend to be risk averse, it is human nature; so take a look at GICs or index funds. If your savings are in a coffee tin above the refrigerator, you are not making your money work for you and are undermining your hard work. As a side note, resist the urge to immediately spend any windfalls you may receive, invest it instead to ensure that you will continue to reap the benefits well into the future.

Buy the Car You Will Drive Forever
It can be practically guaranteed that a vehicle purchased today will be worth much less in one year's time. Couple this deprecation with maintenance costs and insurance premiums and you have a recipe for the true financial drags of owning a car. Every new car you buy ultimately decreases your net worth. You can reduce the negative effects on your finances of owning an automobile by purchasing only the vehicle (or vehicles) you need, with an eye to driving it till it requires replacing.

Talk to a Professional
This is the most important step and yet the most overlooked. People don't want to pay to consult an accountant or financial advisor often because they are embarrassed about the state of their finances. With that said, talking to a professional can get you the latest information on how to utilize tax breaks or they can assist you in your budgeting. Never be ashamed to ask for help and use the resources that are available.

The Bottom Line
Increasing your net worth is not something that will happen overnight. It requires careful planning and the desire to see your plan succeed. With a little foresight and determination, you can improve your financial outlook and provide yourself with a financially secure present and promising future.

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