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I increased my net worth by $30,000 in 6 months by sticking to 3 money rules

  • In January 2021, my net worth was -$15,000. Today, it’s a healthy $15,000 thanks to three steps.
  • I stopped paying my student loans while payments are paused and instead invested that money.
  • I set a savings goal every month then did everything in my power to reach it, including side work.
  • Read more stories on Personal Finance Insider.

Last month — for the first time in my adult life — I reached a positive net worth. As a first-generation college graduate with a Master’s degree who spent most of my working life underemployed, this felt amazing. 

First, let me note my privileges: I am a white person from the suburbs who had the luck of attending an elite university with a very significant financial aid package. Being underemployed was always a choice — which is not the case for most Americans in that situation. I chose to pursue opportunities like a Fulbright scholarship and AmeriCorps position in lieu of a stable and relatively well-paying job for the experiences. These are privileges not everyone is afforded.

Those privileges aside, however, I have not received any cash windfalls or inheritances. I have never even made more than $40,000 in a single year (though that will change by the end of this year!). Despite this, my net worth increased from -$15,000 to $15,000 since January 2021. Here are some of the ways I made that happen.

1. I changed my mindset and adjusted my planning

For so long, the student debt from my Master’s degree has loomed over me and made it challenging to think about anything else. I was sitting on over $50,000 of debt after school and have barely made a dent in it over the years. It quickly became my sole focus: every extra bit of money I received went towards that debt because I couldn’t imagine feeling happy and free until it was gone. Several years later — and still $37,000 in debt — I have realized that I don’t have to continue on this path; I can look at it differently. 

After realizing this, I made the decision to pause my federal loan payments in February of this year. I had already knocked out the four smallest loans (they ranged from $1,000 to $3,000) using the debt snowball approach and could see that I was beginning to make progress. At the same time, I realized paying all of my extra money towards loans that weren’t accruing interest (during the pandemic) wasn’t the best way to build wealth. 

Instead, I started investing more (through both a robo-advisor with Betterment and self-chosen Roth IRA trades) and eventually started to see some growth.  Since February — when I made the choice to focus on building wealth instead of student loan repayment — I  have maxed out my Roth IRA for the first time and rebuilt my emergency fund (which was depleted by the chaos that was 2020). Together, these accounted for an increase of $12,000 in my net worth. 

2. I set obtainable monthly goals

This step — though it seems simple — probably had the largest effect on my overall increase. In addition to the regular monthly transfers I have set up to my accounts, I made a separate, realistic financial goal each month. When my personal investment account was at around $3,800, for example, my goal for the next month was $5,000 in that account. 

I set one goal each month — each for a different account — and put everything extra towards that goal (like my stimulus checks). After I deposited this money into my investment accounts, the magic of compound interest took over and my investments started to increase exponentially. All told, I am approximately $6,000 richer since January due to reaching these goals and reinvesting all interest and dividends.

When I was close but didn’t think I was going to make it, I sought opportunities to earn extra money or worked hard to cut my budget in other areas. It was like a video game I played with myself — except the point totals were real money and the prize was a better financial foundation. 

3. I dedicated time each week to seeking additional income sources

I know side hustling and freelancing aren’t for everyone, but there is usually some way for everyone to make a little extra money. For me, this meant dedicating a specific time each week to seeking out additional income streams. 

As someone who lives in the Alaskan Bush, my opportunities are more limited than most — there are no Craigslist “gigs” or service jobs available, period. Instead, I put aside a specific time each week that I spent researching any possibility to increase my income. I used this time to build up my freelance portfolio and find opportunities my full-time job offered that I wasn’t already taking advantage of. In the end, these different sources accounted for an additional $5,000+ that I invested over the last six months — which has allowed me to surpass my original net worth goal for this time period. 

Many financial success stories are flashy, but mine is proof that they don’t need to be. Making consistent financial choices really does add up — even if it doesn’t feel like it at the time. Three years ago, I made the first deposit into my Roth IRA and today that account makes up a substantial portion of my net worth. I’m not a perfect example — I still have $37,000 in student loans — but maybe next time I will be writing about how I am now debt-free.

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