Three Steps to Build Net Worth

Step One: Spend less than you make. 

Step Two: Invest the difference. 

Step Three: Repeat steps one and two for a long time.  

Spend Less Than You Make 

The first step in building net worth is not spending every penny you make as soon as it hits your bank account. If you are spending all of your money every month, I hate to break it to you, but your net worth will never increase. You have to have money left over at the end of the month to put into savings. Not sure why your money is all getting spent every month? Time to budget. If you haven’t already, go read my “Starting from Scratch” blog (  

Invest the Difference 

Alright, now that you’ve adjusted your spending habits and have accumulated a bit of savings (preferably an emergency fund), it’s time to invest. I am not going to give any advice on what to invest in because I am not a financial advisor. I would recommend going to a financial advisor of some sort to get some guidance on what to do with your money. I personally love Roth IRAs. This is a retirement account in which you invest money that has been taxed today so that it can grow tax-free. There are restrictions on how much you can invest annually and restrictions on when you can withdraw money without paying a penalty, so keep that in mind before you open a Roth IRA. But! They are great because when you are ready and able to withdraw from your Roth IRA, you don’t have to pay taxes on the money you put in OR the interest that the money you put in has earned. My financial advisor likes to refer to Roth IRAs as “tax-neverland.” Although, that’s not entirely true because you pay taxes on the money before you put it in the Roth IRA, but whatever. The only downside to a Roth IRA is that currently, only $6,000 can be contributed to a Roth IRA annually per individual.  

It is entirely up to you what you do with your money. You could simply leave it in a savings account or you could hide it under your mattress, it doesn’t matter to me. But know that you are leaving money on the table by not investing it somehow. Sure, you earn some interest in a savings account. However, the amount of interest that you earn in a savings account is usually much, much lower than the amount of interest that you could be earning in other investment accounts. Hiding the money under your mattress earns you no interest and would probably actually lose value because of inflation, so this really isn’t a great idea. 


Once you’ve made it a habit to spend less than you make and you’ve been making contributions to one or more investment accounts, all that’s left to do is keep doing it! I prefer to set up auto-deposits so that I don’t have to think about it. Each month, x-number of dollars automatically go into different investment accounts that I have set up. Then, when it comes time to calculate my husband’s and my quarterly net worth, I get to see how much those accounts have grown! 

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This is for educational purposes only and is not intended to be used as personal financial advice. I have not taken into consideration anyone’s specific financial situation. Consult with a financial advisor for assistance with making investment decisions.  If you would like one-on-one personal budgeting advice, please click the Budget Coaching button below or contact me to set up a free consultation call. Also, if you haven’t already, sign up for my monthly newsletter! I will be sending out exclusive content each month and you will get a free budget guide as a thank you for signing up!

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Published by Myranda Griebel

It is my goal to reach as many people as possible that need help, guidance, or advice with any aspect of budgeting so that they can work toward living the life they deserve and desire.

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