Money Matters: How to Improve Your Net Worth
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As we face the economic implications of a global pandemic, now is the time to take stock of your finances and create a game plan that will help you weather the storm. And the first step is to get clarity on your own net worth.

“Your net worth is the sum of what you own—your assets—minus the sum of what you owe—your liabilities,” explains personal finance coach Netiva Heard, aka the Frugal CrediTnista, of Harrisburg, North Carolina.

She categorizes assets as items you possess that have monetary value; liabilities are your outstanding financial obligations.

“Assets can be your home, investment properties, vehicles [and] retirement accounts, as well as the money in your personal savings accounts,” she says. “Liabilities are all of your debts, from your mortgage, car loan and student loans to your credit card balances.”

Before the coronavirus outbreak, the 2017 Road to Zero Wealth report—issued by D.C. organizations the Institute for Policy Studies and Prosperity Now—predicted that the median wealth of Black Americans was expected to fall to zero by 2053.

That’s about ten years after people of color are projected to make up the majority of the nation’s population. The current crisis has made matters worse, by threatening the economic security of the more than 7.3 million Black workers in this country who have been forced to stay home without compensation because they can’t earn a single paid sick day.

With more than 40 percent of all Black workers vulnerable to losing wages, which are key for increasing wealth, the need to preserve and bolster our financial foundation is even more urgent.

In addition to calling for government policies that directly address these structural inequities, we must focus our energy and resources on ensuring that our assets exceed our liabilities. In doing so, we play an active role in reversing the trajectory of this grim financial forecast.

Building wealth is rarely a linear process, especially in tenuous times. The process begins with an intention and ends with a commitment—no matter the obstacles, no matter how long it takes.

With the help of Heard and Kiersten Saunders, co-founder of Atlanta-based money blog Rich & Regular, we’ve put together a five-step approach, below. Whether you want to maintain or grow your wealth, follow this strategy. With perseverance, you will ultimately reap the rewards.

1. Get Clarity

To give yourself a starting point, add up your net value, with either a pen and paper or an online net-worth calculator (at nerdwallet.com or bankrate.com).

2. Track Your Progress

Calculate your numbers regularly. “Seeing that figure grow or decrease will help you become more aware of your true financial standing,” Heard says. “It can help you decide the right time to acquire more debt [or] hold on to more cash, and can encourage you to develop a debt payoff plan.”

3. Pay Attention

Even in economic downturns, opportunities to improve your bottom line exist. Cut unnecessary spending, so you can “put your money in places where it can grow, like the stock market or real estate,” says Saunders.

4. Keep Stellar Credit

“Your net worth may not directly impact your credit scores,” Heard says. “However, how you use your credit does directly impact your net worth.” Having excellent credit can help you save money. You can get lower interest rates on major purchases and snag better deals on basic necessities, such as insurance, household utilities and cell phone plans.

5. Play Defense and Offense

Up your assets and reduce your liabilities at the same time to increase your means. Actively work to decrease expenses by a minimum of 1 percent and increase income by also a minimum of 1 percent. “By doing this, we become cognizant of our expenses while becoming more in control of the money flow,” Heard observes.

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