How to make your money work for you

By Matt Mayerle
Modified on May 9, 2023
how to make your money work for you

Rich people tend to stay rich because of one simple reason: They make their money work for them. Learning how to make your money work for you is an important part of becoming financially stable.

When your money works for you, it means the money you bring in can multiply to improve your life. Success breeds opportunities for you to create more success. When it comes to money, that opportunity lies in saving, investing, and spending wisely.

Many of us see our relationship with money as transactional; we earn money to trade for goods and services. Some of us also save a little money as we pay for things when we retire and stop earning wages. This relationship teaches us how to spend smart and plan for the future.  

It’s great to earn a dollar to buy the things we want and the bare essentials we need. But what if you could get your money to work the other way around? What if that dollar could turn itself into two dollars without you having to punch a time clock? 

There is a deeper relationship between you and your money that can benefit you for years to come. With the right strategy applied to your financial planning, you can manage your money in a way that makes you more money.  

In this post, we’ll share some ways that you can start building wealth and make your money work for you. 

Create a Budget 

Before learning how to make your money work for you, you need money to cover your expenses and basic needs. To grow your money, you need to know what kind of funds are genuinely available to you. You can do this by organizing your spending with a budget.  

A budget is the master plan you use to manage your cash flow and apply it to your bills and other expenses. Personal or household budgets usually lay out income and spending on a perpetually monthly basis. Budgets can also detail the finances for short-term projects and savings goals.   

Your budget should be your financial bible, full of unbreakable commandments about how you spend your money and how you shouldn’t. The budget will answer any question that you might have about your available funds. Want to buy a new outfit? Try that new restaurant down the street? Open up your budget and see if you can. 

A definitive list of expenses should include the following: 

Fixed Expenses

These are the bills for a set amount of money that is always due. Fixed expenses are easy to budget for because you’ll always know what amount is due. The steady rate of fixed expenses makes them ideal for automatic withdrawals from your bank account. This is a move that can help you avoid late fees and keep payments on time. 

Variable Expenses 

Variable expenses are bills that are based on your behavior. For example, if you like to sleep with the lights on (and it’s okay if you do!), you’re probably going to have a high electric bill. Conversely, if you stick to generic brands at the store, you can keep your grocery expenses low.

Although we have control over variable expenses, they are tough to control or eliminate because they directly affect our lives and routines. 

Discretionary Expenses 

Discretionary Expenses pay for the things that we want, not the things we need. If you have to look at cutting costs, you should look at your discretionary expenses first. 

There are countless budget apps and templates in programs like Microsoft Excel that can do all the adding, subtracting, and forecasting for you, as long as you feed it some detailed information about your bills and financial goals. 

If you want to start even simpler, write a list of your expenses, add them up, and compare them to your monthly income. That step alone can help you make some immediate decisions that can create more money for you.

You may see a bill or two (like a streaming subscription or rarely used gym membership) that you can cancel. Or maybe you decide that your financial obligations may require you to find an additional revenue stream—or at least a more lucrative one.   

Many people can’t picture themselves following a budget since it tends to be a lot of work. For people with irregular income—like hourly employees or freelancers who work with a varied number of clients—the idea of creating a budget seems like an idea they couldn’t even begin to entertain.

But, when many new people start to use a budget, they quickly realize that financial knowledge is true power. A budget’s job is to assign every dollar it touches to a job—whether to pay a bill or funnel to a savings or reserve account.  

Using a budget is not the same as just “paying bills.” Budgeting can thrust you into action by showing you exactly how much money you have to work with and where it needs to go. This kind of certainty creates mental clarity and reduces looming financial issues to line items. Simultaneously, a budget can simplify and expand your economic outlook.

Those who budget change bad financial habits, effectively prioritize spending, and pay off debt faster than those who don’t. Knowing where you are financially can help you decide what road you want to take to build wealth. A budget allows you to control your money, instead of it controlling you.

Open a High-Yield Savings Account

This is a savings account that pays a significantly higher rate of interest than a standard savings account. On average, they carry an Annual Percentage Yield (APY) that pays out 20 times more than a regular account. In other words, these may be a great way to make your money work for you.

Let’s look at an example: In a traditional savings account with a 0.10 percent APY, a deposit of $1000 would earn $1 after sitting for one year. Based on national averages, that same $1000 would make $25 in the same amount of time sitting in a high-yield savings account in a year.

While interest rates on these accounts can change, they will always be better places to grow your savings than a regular account when it comes to the dividends paid on your investment. 

Based on this incredible difference in return, these accounts are an excellent place for your money to flourish. However, before you run out and open an account, it’s essential to understand that this nearly surefire strategy to grow your savings comes with a price: Accessibility.

High-yield savings accounts usually come with minimum requirements on deposits and can carry monthly maintenance fees. Additionally, these accounts offer limited access to your funds. Many do not provide a debit card option or access money through an ATM and only allow withdrawals via electronic transfers, which can also carry additional fees.

If you think that all these restrictions create a real hassle for you to get your money, you’re right. These types of accounts work best when your money can sit and collect that interest as long as possible. The more layers you have to go through to get your money give you a buffer of consideration. When you have less access to your money, you are also less likely to use it for those impulse purchases you’re almost sure to regret later.  

For your money to grow, you have to learn to leave it alone. And since they can raise money quickly with little effort from you, high-yield savings accounts are a great place to put away money for the times when you need it most—like unexpected medical issues, auto, and home repairs, or to support you during a job loss.

Use this type of money-making account to build an emergency fund that will come in handy when you need it. In general, savings accounts are great ways to make your money work for you. Just make sure you’re aware of all the ins and outs before choosing one.

Get a 401(k)

Participating in a 401(k) plan is a popular strategy to make your money work for you by generating passive income. A 401(k) is a savings plan employers offer that gives employees an opportunity to divert a portion of their paycheck into an investment fund like stocks or mutual funds.

Since a 401(k) is a tax-advantaged account, employee contributions are not taxed until they are withdrawn, which usually doesn’t happen until retirement. That means that the employee’s taxable income is reduced every year that they participate in the plan. This means that a 401(k) can essentially make and save you money over time. 

What Is a Roth 401(k) Plan? 

A Roth 401(k) is a retirement plan that broadly operates like a traditional 401(k), but with a few variations. It is still a payroll deduction that occurs before your paycheck gets to you. Still, unlike a traditional 401(k), contributions to a Roth plan are taxed upfront instead of at the point of withdrawal after retirement.

However, the trade for immediate taxation in a Roth 401(k) is a great deal of access and flexibility throughout the life of the plan. You will not be taxed again when you withdraw at retirement, nor will you ever need to make annual withdrawals out of the fund—a condition of traditional 401(k)s that kicks in at age 72. This means that if you ever want to leave this money to others as an inheritance, your heirs can claim it without paying additional taxes. 

If both options are available to you, the choice comes to when is it most ideal for you to pay taxes—now or in the future. There are uncertainties about what taxes may be applied when it’s time for you to withdraw. On the other hand, paying taxes in the present will decrease your contribution, which will affect the potential earnings on your investment.  

Whatever you choose, know that participating in a retirement plan is essential. One that allows you to contribute automatically is a strong bet on your future.  

Ways To Make Some Investments

If you’re looking for ways to make money, investing may be one option. Playing the stock market is no longer just for the people on Wallstreet. With the advantages of technology and a more comprehensive understanding of its advantages, more people are investing in stocks and doing so without a substantial initial investment. Getting started can be as simple as opening an online account and contributing less than $500.

Stock market investment is a great way to put your money to work, provided that you are willing to ride out the market’s natural dips and dives. Diversity in investments can deliver some exciting results, and success in the market has proven profitable for those who build their portfolio around consistently good companies. 

These are two of the best-known investment options available: 

Individual Stocks

This option is for buying single or multiple shares of a specific company. If there is a particular company you want to invest in or want to try out financing on a small scale, this may be the route for you. Just know that buying stocks this way may take you longer to diversify your overall portfolio and will require a significant amount of time and money to build. 

Mutual Funds and Exchange Traded Funds

With a mutual fund, you can buy small portions of various stocks at the same time. As an investor, your contribution is pooled with others and operated by a money manager, who decides what securities to invest in. There are many types of mutual funds available, organized to focus on particular securities (stocks, bonds, money markets, etc.) or achieve specific profit goals.  

Regardless of the option you choose, playing the stock market wisely has very little to do with the drama we’ve seen in some of our favorite movies; it’s doubtful that you’ll find yourself shouting “buy” or “sell” on the trading floor of the New York Stock Exchange. To make your money work for you in the market, be patient and listen to advice from the experts to learn how to make the best decisions. 

Find a Residual Income Stream 

Income that you continue to receive on work after you’ve completed it is called residual income. Residual income is an incredible way to make your money work for you because of the potential return on a one-time investment of time and money.  

Examples of potential residual income streams include:  


These are payments to the owner of a property for its use. Artists and inventors make royalties when other people use or recreate their work. Depending on the popularity of the intellectual property, royalties can be a revenue stream that never dries up. 

Rental Property 

If you are fortunate enough to own property, making an investment that can make it viable for renting should be considered. A solid rental property can turn a profit for years to come and can be a source of perpetual wealth to draw from in lean times through the use of equity loans or an outright property sale. 

Real Estate Syndication 

Another long-term property investment option is to explore real estate syndication. A real estate syndicate is a group of investors that pool their funds to purchase and manage large properties. Some of the most popular conglomerates are focused on multi-family apartment complexes. These can yield significant returns due to their size and scalability on things like tenant rents and fees.

Real estate syndications are an ideal investment because your access to your invested capital is restricted for many years. However, your syndicate will inform you of its growth and how it plans to maximize your return. Inside a real estate syndicate, your money is being invested in one of the most sought-after commodities on earth—land. Put your money here, and be okay with not seeing it for a while. 

Earning meaningful money from a residual income stream depends heavily on the individual and their talents. But, if you can find the audience looking for what you can give them, a residual income stream can help you realize your financial dreams, even while you sleep.  

Pay Off Debt, and Don’t Create More 

One of the only ways to make your money work for you is if you have money to begin with. In order to invest in your future, you have to handle the bills that you created in the past. This means paying off credit card debt as soon as possible.

The best way to pay off debt fast is to make on-time payments that exceed the minimum amount due. Staying on top of payments on your bills such as a cash advance loan, will ensure that the bulk of the money you pay goes directly to the balance.  

In addition to paying off credit card balances, it is also critical that you don’t create any more new debt. Many feel that some credit cards are worth their hassle—particularly those that offer rewards or incentives.

While some of them sound great, adding another credit card won’t put your money to work for you. Instead, another credit card is just another potential bill to pay. 

In addition to all of the tips, advice, and strategies we shared here, what matters most is your ultimate happiness. You must never hesitate to set goals for yourself and take the time to explore options for long-term financial planning.

Making changes is the only way to slow—and eventually end—the cycle of financial stress in your life. To get out of debt, you must start making decisions like a wealthy person. Learning how to make your money work for you is a big part of that. If rich people can make their money work for them, it’s time you started doing the same thing.

Every option for making money work for you has its advantages and disadvantages. Like any financial endeavor, you will have to make the choice that is right for you right now. That means that you should stay curious about financial options for investments of any kind. Finding ways to make your money work for you is a never-ending process.

One of the most significant barriers between the average person and wealth is their fear of the unknown. It’s essential to find ways to maximize the impact money has on our lives. This will help us build security to protect us in lean times. So do your research, ask questions, and don’t be afraid to ask for help in getting started, ever. It’s never too late to start building the wealth that will set you free.


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