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Home»Finance»5 Ways to Make Your Money Work for You
Finance

5 Ways to Make Your Money Work for You

Michael JenningsBy Michael JenningsSep 16, 2024Updated:May 13, 2025No Comments7 Mins Read

Everyday, people work tirelessly at their 9 to 5 jobs in the hopes of making money and creating a better life for themselves. While hard work is one of the best ways to make moves towards a better life, have you ever considered the ways in which your money can work for you? 

It is our responsibility not only as consumers to work and bring in money, but learning what you can do with your money to help it grow can be equally beneficial. In addition to your earned income, you can learn to capitalize on your budgeting, passive income and saving.

By learning how to harness money management and developing good financial habits, you can exponentially grow your income! Building an emergency fund is crucial, as it provides a financial buffer that can help you avoid resorting to emergency loans during unforeseen expenses.

Contents hide
1 Tip #1: Invest
2 Tip #2: Develop Passive Income
3 Tip #3: Learn to Budget and Create Financial Goals
4 Tip #4: Leverage Your Credit Cards
5 Tip #5: Save Save Save

Tip #1: Invest

Investing is essential in making your money work for you. To break down this concept, investing is when an individual purchases some type of goods that will yield a return over a period of time. By learning how, when and what to invest in, you can turn investing into a source of income that can help you to reach your own financial goals.  

If you are looking to invest, the first step is to assess your risk tolerance. By definition, risk tolerance is the degree of loss that an investor is willing to accept.

There is risk associated with any type of investment. However, there are some investments that are more conservative, and carry less of a risk of loss than others. Knowing where you fall on this scale and spectrum is the first step in investing.  

Once you have determined your level of comfort in investments, you can consider investing in the following: 

  • Stocks: A stock represents partial ownership of a company. When investing in stocks, there is typically high risk but higher reward associated with this type of investment. When investing in stocks, you have the opportunity to make these types of purchases and trades yourself, or you can seek out the professional guidance of a financial advisor. 
  • Real Estate: There are many ways to invest in real estate. You can invest in a REIT (real estate investment trust), consider flipping a property or renting out a room in your current home.
  • Mutual Funds: Mutual funds are a type of investment that is professionally managed by investment companies. This type of investment combines and pools money from many different investors in order to secure their purchases.

While the idea of investing can be intimidating for many, there are many resources that you can seek out to get started. Consider researching investing for beginners, reading a book that discusses investing basics or listen to an investing podcast! 

Tip #2: Develop Passive Income

We’ve all heard the phrase “work smarter not harder.” Passive income is money that individuals have coming in without directly having to work for this money. Passive income is likely around all of us right now, and only requires some creativity to get off the ground.

In addition, passive income can be a great way to earn some extra cash that can help you pay off debts or add to your savings without a significant time commitment. 

If you are considering incorporating some type of passive income into your life, you may way to consider:  

  • Renting out a room or level of your home
  • Renting out your entire home when you travel 
  • Renting out a parking space
  • Selling photography or digital designs online
  • Advertise on your car

Especially with the rise of social media platforms such as instagram, the amount of individuals earning passive income has increased significantly in recent years. Passive income can be vital in helping you achieve your financial goals. 

Tip #3: Learn to Budget and Create Financial Goals

While the idea of incorporating a budget into your day to day life may sound basic, 84% of Americans have reported that they overspend.

Creating and sticking to a budget is an integral part in your financial management and health. If you are looking to incorporate a budget into your life, consider reviewing and following the below steps: 

  1. Track your expenses: It is important to assess and understand how much money you have going in and coming out each month. Consider tracking your expenses for 2-3 months to get a full picture of this. 
  2. Organize your expenses: Once you know what kind of money you are spending each month, review your spending and evaluate where you are spending your money. 
  3. Sort wants from needs: Once your spending is organized, see where you can trim some fat. Do you have unused subscriptions? Are you grocery shopping and then eating out regularly? See what processes in your day to day life can be streamlined!
  4. Set a budget and stick to it: If you see that you are spending too much money eating out and set a budget, it is important that you hold yourself accountable to sticking to this. Setting a budget does not mean you can’t have fun! Consider picking a restaurant where you and a friend can share food, or a BYOB joint! Every little bit counts.

Once you have a budget created, it is important to assess your financial goals. Your budget will look different if you are trying to save for a small vacation versus saving for a house. 

Tip #4: Leverage Your Credit Cards

While the average credit card debt hovers around 1.12 trillion, there is a way that you can use credit cards effectively to help you make your money work for you. 

First and foremost, it is important that you select the credit card that is right for you and your lifestyle. A good pro tip is to select a credit card with a rewards system that works for you. Review your budget and spending habits.

If you tend to dine out frequently, select a credit card that offers cash back at restaurants. If you love to travel, select a credit card that helps you earn frequent flier miles.  

You can also use credit cards to help you build your credit and pay off debt with balance transfer credit cards.  

One important note, make sure that you carefully review the terms and conditions of your credit cards, and strive to pay off your balance each month. Credit card interest and compound dramatically, and leave you in a financial hole of debt that may be difficult to climb out of. 

Tip #5: Save Save Save

Last by certainly not least, ensure that you are saving regularly. Saving, and constantly reevaluating your budget to determine your short and long term financial goals is an excellent way to make your money work for you. 

If you are looking for ways to be savvy and save, consider the following: 

  • Start saving for retirement: Regardless of your age, it is never too early to start saving for retirement. Even if you are putting just a little away each month, saving for retirement (especially in your 20s) can yield significant results later in life.
  • Incorporate an emergency fund: Experts suggest that individuals keep at least 3-6 months worth of expenses in an emergency fund for a rainy day.
  • Avoid high-interest debt: It is difficult to save if you are constantly making payments that are not even going toward your principal. If you are using a credit card to help build your credit score or gain rewards, make sure you are being responsible about paying off the balance! Other forms of high-interest debt are things like a car title loan or really anything over about 8%. Prioritize paying this off.

You don’t need to be a financial wizard to make your money work for you! By incorporating these simple tips and tricks you can work towards achieving your financial goals.

Michael Jennings

    Michael wrote his first article for Digitaledge.org in 2015 and now calls himself a “tech cupid.” Proud owner of a weird collection of cocktail ingredients and rings, along with a fascination for AI and algorithms. He loves to write about devices that make our life easier and occasionally about movies. “Would love to witness the Zombie Apocalypse before I die.”- Michael

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