Skip to content
SuperMoney logo
SuperMoney logo

8 Smart Ways to Make Your Money Work for You

Last updated 03/19/2024 by

Vlad Falin

Edited by

Fact checked by

When learning how to make your money work for you, you first have to develop reachable financial goals. After you’ve defined your goals, outline your budget so you have a plan for your savings and debt payments. This will start to give you a solid financial foundation that you can then invest in both the stock market and yourself.
Love it or hate it, money is the key to living a comfortable life, hitting your milestones, and attaining lifelong financial stability. But unless you win the lottery, growing your wealth doesn’t happen overnight; you’ll need to plan and save for years. Fortunately, by making your money work for you, you can achieve financial success that much sooner.
Before you can start making your money do the heavy lifting, you’ll have to lay the groundwork. While some of these steps require time and dedication, your long-term returns will pay off handsomely. Here are eight steps you can take to make your money work for you.

Get Competing Personal Loan Offers In Minutes

Compare rates from multiple vetted lenders. Discover your lowest eligible rate.
Get Personalized Rates
It's quick, free and won’t hurt your credit score

1. Set your financial goals

It’s impossible to make money work for you if you don’t know what you need it to do. Creating specific financial goals can help you outline your future life and how to get there.
And by setting them now, you can actively plan and work toward them instead of hoping you stumble into them.

2. Define your budget

Once you’ve defined your financial goals, it’s time to look at your budget. While setting a budget seems restrictive, you’ll free up more money long-term because you’re not scrimping to get by. (Besides, learning how not to spend money is an essential step in shedding bad financial habits.)

Lay out your finances

The first step in building a budget is to review your current finances. If it’s your first time budgeting, look back at your bank statements, bills, and receipts for the last 3 to 6 months to get a comprehensive view of your spending. This also ensures you’ll catch regular-but-periodic expenses, such as quarterly insurance premiums.

Determine your income

Next, it’s time to review how much you earn. Don’t just look at your regular wages; you should also consider child support or alimony payments and your side hustle. Also consider additional income from outside sources, such as interest (if you earn it on a bank account) or rental income.

Pro Tip

Always use your net income (income after taxes and deductions) when determining your budget. Otherwise, you risk overextending your finances by budgeting more money than you have.

Plan your budget

Next, it’s time to build your budget. Many people find the 50/30/20 method helpful as a starting place. In this budget:
  • 50% of your income goes to needs like rent and utilities
  • 30% of your income covers wants such as entertainment
  • 20% of your income goes into savings, including your retirement fund
Putting your budget into boxes like this can make it easier to ensure you’re not overspending in a specific category. But if you prefer to track your dollars and trim down the excess in a spreadsheet, that’s a valid method, too!
Another option is something called “reverse budgeting.” It starts with putting 15% to 20% in your savings; after that, spend the rest.
This puts the focus on one of the more important parts of personal finance: regularly setting aside money into an emergency fund, retirement accounts, and brokerage accounts. You are free to use the remainder of your income as you see fit, whether that be debt reduction, vacations, groceries, etc.

Pro Tip

Your income, expenses, and goals will shift over time. As such, anytime you encounter a major life event, such as having a child, switching jobs, or bringing in more cash, you should reexamine your budget. It’s also helpful to designate one night a month as a budget review night to keep you on track.

3. Focus on your savings

A key step of the budgeting process is to set aside money for later. Saving money at regular intervals can help you achieve your goals, fill your retirement account, and build real wealth. It can also help you avoid taking on more debt later.

Open a high-yield savings account

The average savings account APY sits at a paltry 0.06% according to the FDIC. That means if you’re putting money into regular savings accounts, you’re making less than one-tenth of one penny per dollar you save.
High-yield savings accounts provide a better alternative for savers looking to capitalize on their cash. These accounts function similarly to a regular interest-bearing account, but they offer better interest rates to grow your wealth faster. Plus, they tend to have stricter withdrawal requirements than your checking account, encouraging you to save more money.
Savings accounts are a great place to save for expenses like:
  • A down payment on a house
  • Holiday and birthday presents
  • Your next vacation
  • Your or your child’s wedding

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

Loading results ...

Another option to improve your personal financial situation is to put your money into a money market account. While this type of bank account often boasts impressive rates and can help your money grow faster, they tend to come with more restrictions.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

Loading results ...

Create an emergency fund

For many Americans, just one surprise medical event or car repair is all it takes to go into debt. But you don’t have to be one of them. Saving just a few hundred dollars in an emergency fund can help you jump such a major hurdle without accruing more debt.
Experts suggest saving a minimum of 3 to 6 months’ worth of living expenses in an emergency fund to tide you over when life happens. But don’t expect to save that much overnight. Instead, set small goals to start — say, $500 or $1,000 — and celebrate when you reach them.

4. Pay off your debts

Getting out of debt is a great way to make your money work for you, or at least to get your money to stop working against you. Every dollar you pay someone else is one less dollar you have — and making interest payments can drain your paycheck, fast. Here are some ways to help get out of debt faster.

The snowflake method

With the snowflake method, you put any extra cash (such as a raise or bonus at work) you earn or any extra day-to-day savings toward your debt. The more money you throw at your balance, the faster you’ll pay it off. This can be used in combination with the methods below.

The snowball method

The snowball method involves paying off debt in a specific order: smallest to largest. Under this method, you make the minimum payment on every debt except your smallest balance. Throw every dollar you can spare at that one. Then, once that balance is paid off, you add that monthly payment to your next-smallest debt to pay it down faster.
The main disadvantage of the snowball method is that your higher-interest rate debts may continue to grow. However, seeing debt accounts get paid off gives you small goals to celebrate which can help create momentum and improve your chances of success.

The avalanche method

The avalanche method is designed for borrowers who have high interest debts, such as credit card debt and unsecured personal loans. In this method, you pay off the debt with the highest interest rate first, then work your way down the ladder. In the long run, you stand to save hundreds or even thousands in interest payments.

Pro Tip

The “right” way to pay off debt depends on your financial situation, as each method makes a tradeoff between time and long-term costs. Choose the method that makes the most sense for your household.

5. Automate your finances

Automating your finances makes it easier to stay on budget, pay your bills, pay off your debts, and most importantly, save. And since paying bills on time makes up about 35% of your overall FICO score, setting up autopay can help improve your credit.
You can even set up automatic contributions to your saving, investing, and retirement accounts. This ensures you don’t forget to save money for the future.

6. Stop paying for your money

There’s nothing more frustrating than paying to save, use, or access your own money. Here’s how to stop.

Banking fees

Financial institutions love their fees, and sometimes they feel unavoidable. You may have come across one or more of these fees in your lifetime, including:
  • Opening and closing
  • Maintenance
  • Minimum account
  • Card replacement
  • Under-using
  • Overdrawing
  • Late payment
  • Loan prepayment fees
Financial institutions that charge fees for each interaction use your money to pad their pockets — but you don’t have to let them. Many online banks, community banks, and credit unions charge smaller or fewer fees than large national banks.

ATM fees

Withdrawing money from your account shouldn’t cost you a penny. That being said, ATMs often charge “out of network” customers fees for just that. You can avoid making these payments by using in-network ATMs, switching to another bank, or withdrawing cash straight from the bank.

Investment and trading fees

If you have investment accounts, you may be paying your broker or certified financial planner annual or quarterly fees to manage or advise your accounts. Some assets also charge more fees than others, such as mutual funds. And if you trade often, you might be losing out on tax benefits or racking up tons of transaction fees or commissions.
Fortunately, many modern robo-advisors, online brokerages, and retirement accounts have greatly reduced or eliminated fees. Moving your investment account to one of these alternatives could help reduce the fees on your investments.
However, more important than reducing fees is the value you receive for the fees you pay. That 1% advisory fee on your investments may be worth it, especially if you don’t have the expertise, time, or desire to manage the assets yourself. Aiming for the cheapest possible solution may not, in the end, be the best choice for you.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

Loading results ...

7. Start investing for your future

Investing is one of the best avenues to building wealth thanks to the effects of compound interest. Capitalizing on this passive income avenue means that you can watch your assets appreciate, generate interest or dividends, or even bring in rent money.
Stocks are one popular asset class that can help you in building wealth. Other places to invest money include bonds, mutual funds, ETFs, and index funds. Many investment apps also let you select and trade individual securities on your own, including stocks, bonds, investment funds, and mutual funds.
Private and commercial real estate investments are also known for generating extra income. However, real estate investing often requires more money and effort upfront and long-term.
Each of these investments comes with its own set of risks, returns, and special considerations. Additionally, you should take care to spread your capital among several industries and assets. If you put all your money into one asset, you risk losing everything if the market slumps.
If you’re uncomfortable investing money alone you can find a trusted Investment Advisor to help, or there are many robo-advisors and online brokerages, like Acorns Invest or Betterment, that provide tools and algorithms to build a portfolio that fits your risk tolerance.
Then, all you have to do is contribute funds regularly and watch your account grow.

Pro Tip

Investing money is a long-term strategy to build wealth, which is why many investors focus on their retirement savings. The most successful investment strategy often involves starting early and contributing for years or decades, and taking advantage of any company match in your 401(k) plan.

8. Spending money to make money

How you spend your money can also generate additional opportunities to save or even create more cash. They won’t get you rich, but they can help provide some extra cash or savings to help you reach your personal finance goals and make your money work for you.
For instance, many credit cards offer points, miles, or cash-back for making regular purchases. As long as you pay off your balance each month, you can get back hundreds or even thousands in rewards each year just for your everyday purchases like groceries or gas.
Many stores also offer coupons, cashback, or other shopping rewards, allowing you to save and earn money with your regular purchases.


How can I grow my money fast?

The best way to grow your money is by saving 20% of your income and investing in a well-diversified investment portfolio. However, building real wealth this way often takes years or decades. Unfortunately, growing money faster generally involves taking bigger risks.
Other ways to grow your money include saving in a high-yield savings account, buying bonds, or investing in real estate.

What does making your money work for you mean?

Making your money work for you means utilizing your existing income to create better financial stability in your life. For example, one could reduce the burden of high-interest debt, regularly invest to take advantage of compound interest, or find investments that can create more income.

Where can I put my money to earn the most interest?

That will depend on the amount of risk you’re willing to take. A high-yield savings account is safe and generally pays more interest than a regular savings account. Typically, online banks pay the best rates, followed by community banks and credit unions.
Keep in mind that a well-diversified investment portfolio can earn more interest and build wealth faster than a high yield savings account. The downside is it also introduces more risk. Therefore, in the short term, it can perform worse than a savings account but better over long periods (usually more than five years).

How do you multiply money?

A good way to multiply your money is by regularly and systematically investing in the stock market and passive income streams.
The goal is to make your money work in the long term. Over time, compound interest and dividend reinvestments will grow your net worth. Then, when you’re ready, you can cash out and live your best life.

How do I let myself spend money?

It may be easier to spend money once your needs and all your debts are taken care of. Start by building a budget, get your savings built up, and buckle down on your debts.
When you feel financially secure, you can start splurging occasionally without worrying that you’re only one paycheck away from financial disaster.

Key takeaways

  • Setting financial goals is a critical first step in making your money work for you.
  • A good way to make your money work for you is by investing it in the stock market and building passive income streams that can earn money with very little effort.
  • To maximize the returns on your investments, be sure to take advantage of compound interest and dividend reinvestment.
  • Once you’ve built up a strong financial foundation, you can start exploring more rewarding (but riskier) projects. This could include real estate investing, starting your own business, and other streams of residual income.
  • Regardless of how you choose to invest your money, it’s important to stay focused and disciplined throughout the process.
  • By investing in yourself, your skills, and your professional network, you can set yourself up for long-term success and financial freedom, and most importantly financial growth.

Share this post:

You might also like