The average family’s net worth increased 37% between 2019 and 2022.
Median family income also rose during this period but by 3%.
Setting financial goals and paying off debt are two ways you can boost your own net worth.
A recent survey from the Federal Reserve found that the average net worth for families has grown in recent years. While the average family saw their household net worth rise, not everyone experienced the same growing net worth.
Let’s explore why average household net worth has grown and how you can take action to build your own net worth.
The Average American Family’s Net Worth Grew During the Pandemic
In addition to wreaking havoc on people’s health around the world, the pandemic also inflicted damage on the economy. When the virus came on the scene, it created a volatile financial situation for many.
Average net worth didn’t just inch forward, it jumped by 37% in the three-year period.
With the unpredictable economic times, it might be surprising to learn that the average American family’s net worth grew between 2019 and 2022. Average net worth didn’t just inch forward, it jumped by 37% in the three-year period. That’s the largest jump in wealth recorded since the Federal Reserve started collecting this data more than 30 years ago.
The reasons behind the increasing net worth numbers vary from family to family. But, in general, the gains are attributed to rising home values, federal pandemic relief funds, and a hot job market.
How to Increase Your Own Net Worth
Whether or not you’ve seen your own net worth rise recently, it’s possible to push your net worth in the right direction. Below are some strategies to help you grow your own net worth.
Set financial goals: It can be difficult to make progress toward a brighter financial future unless you have milestones to achieve along the way. For example, you might set a goal to save for a vacation or get out of credit card debt. Hitting smaller financial goals can help you build momentum as you grow your net worth.
Build an emergency fund: An emergency fund provides a baseline of financial stability. Many experts recommend saving between three to six months’ worth of expenses in an emergency fund, which can help you handle unexpected costs that come your way. If possible, tuck these funds into a high-yield savings account to make the most of your savings.
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Pay off high-interest debt: High-interest debt can act like a drain on your financial situation. Take action to eliminate it by funneling available money toward your debt. Another strategy is to consolidate multiple high-interest loans into a single loan. If a single payment sounds more manageable, consider a debt consolidation loan.
Minimize big expenses: Most Americans use a significant portion of their budget to cover housing, transportation, and food costs. By choosing to minimize your big expenses, you keep more funds to save or invest. For example, deciding to live in a smaller house or driving an older vehicle could open the door to building a larger investment portfolio.
The Bottom Line
On average, American households have seen a rising net worth in recent years. The overall trend is positive. But as an individual, you have an opportunity to push your net worth in a positive direction.
Saving money for the future is a good place to start growing your net worth. Consider opening a high-yield savings account to build your savings and boost your net worth.