Americans' Net Worth Rose 37% From 2019 to 2022. Here's How to Boost Yours

Your net worth is one of those things you probably don't think about often. Or maybe you do. But either way, you may be interested to know that in the three-year period from 2019 to 2022, Americans' net worth grew by a rather impressive 37%, according to data from the Federal Reserve. To give that context, if you had a $10,000 net worth and it rose 37%, you'd be at $13,700.

Now, there are different reasons why Americans saw their net worth rise so much. Part of it had to do with home values soaring. Stock market gains also help account for that uptick in net worth.

If you're eager to boost your net worth, there are a few key steps you can take. But first, let's make sure you understand what net worth is. The formula is simple: Your assets minus your liabilities equal your net worth. If you have $30,000 in your savings account and own a home worth $300,000, but you also owe $130,000 on your mortgage, you have a net worth of $200,000.

With that in mind, here's how to set yourself up to grow your net worth.

1. Put more money into savings

It's a good idea to have money in savings for emergency expenses. And the more savings you have, the higher your net worth can grow.

But if you're good on near-term savings, you can fund your long-term savings by contributing money to an individual retirement account (IRA) or 401(k) for retirement. These are assets that also count toward net worth.

It's not always so easy to come up with money for various savings accounts. But one trick that might help is setting up an automatic transfer.

Employer 401(k) plans do this by default, since contributions are deducted from your paychecks. But if you're funding an IRA, for example, you can set up an automatic contribution every month so money leaves your checking account and lands there instead. If that money gets moved automatically, you may be less likely to spend it on something else accidentally.

2. Pay off your credit card debt

Your debts are part of your net worth calculation. So the less debt you have, the more your net worth can grow.

You may have different types of debt, including a mortgage, car loan, and credit card balance. But of those, it pays to focus on your credit cards first, since chances are, your home and auto loan have lower interest rates, and fixed rates at that.

Of course, it's possible to have a variable rate mortgage. But even so, the typical mortgage has a lower interest rate than a credit card does, even with borrowing rates for homeowners being higher today than they were just a few years ago.

One thing you may want to do is consolidate your credit card debt if you're carrying multiple balances at high interest rates. A balance transfer could work in this situation, but be mindful of the fees and limited-time introductory rate these offers tend to come with. Another good option is to consider consolidating credit card debt via a home equity or personal loan.

3. Invest in the stock market

Funds you need for near-term expenses should not be invested. But putting your spare cash into the stock market could grow your net worth in a very meaningful way.

Over the past 50 years, the stock market has averaged an annual 10% return. If you have $10,000 you don't need for other purposes and you invest it in stocks for 20 years, you might grow it into almost $62,000.

And if you're worried that investing in the stock market is too risky, know that you can mitigate the risks involved by investing over a long period of time. That gives you an opportunity to recover from downturns. Diversifying your holdings can also help minimize your losses and lend to nice gains in your portfolio.

Homeownership can boost net worth

Whether your net worth increased in recent years or not, there are steps you can take to boost that number in the coming years. Of course, it's worth mentioning that buying a home can be a great way to grow your net worth, since home values have a tendency to rise over time. But right now, home prices are up, mortgages are expensive to sign, and there's not a lot of inventory. So you might face a host of challenges in today's housing market.

If homeownership isn't attainable soon for you, don't despair. Boosting your savings, paying down credit cards, and investing your money are all other very effective ways to give your net worth a lift.