Net Worth is what Is Left. Net worth is determined by subtracting liabilities from assets, as indicated below, the net worth formula?
Assets – Liabilities = Net Worth, or;
What is owned – What is owed = Net Worth.
Strategies to Increase Your Net Worth:
You can increase your net worth by increasing assets, decreasing liabilities, or doing both.
One way to increase assets and net worth is to cut back on spending. Perhaps consider forgoing the cup of coffee or soda you buy each day as you head to class, as any decrease in spending leaves money in the bank as an asset. Reducing expenses on high-cost items such as housing and transportation will have an even greater effect on assets.
A second way to increase net worth is to increase income to build assets or pay down debts. For example, as you earn more money, perhaps consider saving most of the difference between your new income and your old income rather than using the added money for more spending. Paying off debt, especially high-interest credit card balances, increases net worth.