How to Make Your Money Work For You [Complete 2022 Guide]

Automate your finances

In this digital age, it’s now incredibly easy to automate your finances in just about every way you can imagine, from automatic bill payments, to automatic investment contributions, according to Kenny Senour, certified financial planner with Millennial Wealth Management.

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“For example, if your goal is to max out your Roth IRA in 2022 by contributing the full $6,000, consider setting up an automatic contribution of $500 each month,” he said. “Automating your finances can be a huge help in managing your monthly cash flow, so any automation should ideally occur the same day your paycheck or direct deposit hits your bank account.”

Building Wealth

1. Pay yourself first

NBC / Via Saving money can be hard sometimes, especially when it feels like you have bill after bill, debt, and household expenses. Even when you intend to save a little cash this month, it can be easy to just get caught up in taking care of (and even overspending on) your expenses. Then before you know it, “I’ll save money this month” becomes “I’ll save money next month.” And the cycle just continues. When you pay yourself first, aka save or invest a little money as soon as you get your paycheck, saving is no longer an afterthought; it’s no longer something you might be able to do if you have some leftover cash. That’s not to say that you should totally neglect your expenses, though. You can even set up an automatic schedule for having money transferred into your savings account, so you won’t have to lift a finger to save!


7. Pay more than just the minimum on your monthly debt payments

NBC / Via Interest charges can seriously eat into your monthly payment. Oftentimes, when you make just the minimum monthly payment on a bill, all or most of that cash just goes toward interest. Not your principal balance. In other words, it ends up feeling like you’re paying and paying and paying, but you aren’t seeing a lower balance. This is obviously super frustrating! So to make sure you can also attack some of that balance, try paying a little more than just the minimum each month if you can afford it. Even $20 more than the minimum can go a long way. Just be sure to contact your loan servicer to confirm that the extra money will go toward your principal and not toward next month’s interest.

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5. Choose credit cards with rewards you’ll actually use

Using a credit card might not feel like putting your money to work, but choosing a card with rewards appropriate for your lifestyle (read: airline miles cards aren’t great for people uninterested in travel) means each dollar you spend on your cards is doing double duty.

“As a financial planner, we don’t like debt, but if you have the cash flow and predictability in your budget and you can pay off your bill every month, there are great credit cards out there,” says Gould.

Read More: The best rewards credit cards of 2019

If you have credit card debt, this strategy isn’t for you — the key to making your money work with your cards is being able to pay off your bill in full every month.

Invest in Indexed Mutual Funds

Indexed mutual funds are also a great way to grow wealth, advised Carter Seuthe, CEO of Credit Summit. These funds work by investing equally in every stock in a given exchange, such as the Dow Jones or the NASDAQ, he explained.

“They have consistently been shown to outperform most actively managed investment accounts,” he said, “and come with the added benefit of avoiding the fees that come with intensive management.”

Indexed mutual funds provide a good return without a huge amount of risk, he added.

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Learn To Budget

A budget is a vital tool for changing the way you handle your money.

When you are budgeting, you understand where your money is coming from and are purposeful about where you spend it. You are making your money do what you want it to do, rather than spending without a plan.

The goal of budgeting is to always spend less than you earn.

When you create a budget, you assign every dollar you earn to a spending category. You can use a budget to:

  • Reduce your spending
  • Understand where your money is going
  • Identify bad financial habits
  • Pay off debt
  • Avoid creating new debt
  • Prioritize spending on things that are important to you
  • Save for the future

Budgeting is not a one-time action. It should be something you actively engage in every day. You may need to adjust your budget from month to month to account for large expenses or your own spending habits.

When you know how much income you have, you can decide where to put it. When you are deliberate about where you spend it, you are in control of your money. This is the first step towards making it work the way you want to, rather than feeling controlled by your finances.

#3. Have your money make money: investing directly in businesses

This is the investing I’m really keen on and with, what I believe are, rather good reasons.

You see, risk is the bane of any investing and the biggest reason why people don’t do it. What is not very well understood by most every-day investors is that our perception of risk is correlated with our level of control. Simply put, this means that the less control we have over something, the higher risk we perceive it to be.

Don’t believe me? Let me ask you: would you be worried about nuclear war if you controlled the switch? No you wouldn’t.

It is the same with investing. We worry about losing our money on stock market because we have very little control over what is happening. Frankly, it many cases we have imperfect information as well never mind how hard we try to keep abreast.

When you invest in local businesses directly the risk-control seesaw swings.

You have more control and hence the risk is lower. This is why we bought 50% stake in a local MOT and car service garage.

Can you fail? Of course you can. At the same time, if you follow some fairly simple rules for selecting the businesses you invest in you have to be a real klutz to fail big time.

How do you make more money from home?

There are plenty of ways to make money online, especially as more industries shift roles to work-from-home positions. Copywriters, virtual assistants, and customer service representatives have been able to make a full-time living from home. You can also try selling items through eBay or with a dropshipping business. Some even find success creating YouTube videos and podcasts.

#5. Make your money work for you: invest in yourself

Finally, a way to make your money work for you is

Finally, a way to make your money work for you is through you. What I mean is that it is always worth investing in yourself, in gaining new and varied competencies.

These can range from cooking and baking to coding and public speaking. Investing in yourself can be spending money to develop a healthy habit; or get rid of a very unhealthy one.

Do you know that the £250 I spent in 2006 on a stop smoking workshop is one of the better investments I’ve made? To start with, I have not smoked for over ten year. Let’s, for simplicity sake, say 10. Are you surprised that by investing £250 for the workshop I’ve saved over £20,000? I am. And my lungs have recovered so my health has benefited. You see now why this is a cracking investment.

Remember also that education always pays off. And I’m talking about education, not degrees.

3. Store it in retirement accounts

Retirement accounts such as 401(k)s and IRAs are investment accounts, meaning your savings are invested in the market and have the potential to grow exponentially.

“The key is to get money in a 401(k),” says Gould. “Save as much as possible to have your money work for you tax-efficiently and to get money in the markets. The first bucket outside of the emergency fund is the 401(k) up to the match [if your employer provides one]. You don’t want to give away free money.”

After that, Gould explains, you’ll want to put money in an IRA or a Roth IRA.

“Another good tool people don’t think about are HSAs,” he says, referring to the savings accounts for which people with high-deductible health insurance coverage are eligible. “If you sock money away in an HSA you don’t lose it, and whenever you have healthcare costs, you can pull the money out and not pay taxes on it. When you turn 65, it turns into an IRA and you don’t get penalized for using it for other costs — you can pay Medicare costs and long-term care premiums.”

Read more about how to use an HSA »

How Much Money Do You Need to Start Investing?

It’s a commonly held belief that you need to have a large sum of money available before you start investing. That’s simply not the case.

Now, more than ever before, there are many different investment options available to you for a small initial commitment. In fact, there is no limit on the low end – whatever money you have that you would like to invest, you can find a way to put that money to work.

Of course, you can’t expect to make huge gains by only investing a small amount.

If you invest $100 and get a return of 10% in the first year, that’s a good performance – but you will only have made $10. If you are going to start small, consider setting aside an amount that you can afford each month to add to your investment.

Over time, by adding small amounts months after month, you can build up a meaningful investment that could impact your financial life in a positive way.

Invest, Invest, and Invest!

Investing money is akin to making it, it is a long-term strategy for building actual tangible wealth that can be utilised as income later on. There are several options to grow money through investments: 


  • The stock market can be a daunting place for novice investors, but with a little amount of effort, the risks are worth the reward. 
  • Stocks essentially represent legal ownership in a company, when you invest in a stock, you automatically become a part-owner of the company. 
  • Investing in stocks can be an efficient way to build wealth gradually over the years. 
  • One of the easier ways to make a foray into the stock market is by investing in mutual funds or index funds. These investments are like a group of diverse stocks and other holdings that appreciate over time. 
  • Mutual funds are the better options for first-time investors to generate income as they require very little effort and planning to get started. 
  • The most important thing to remember while investing in stocks is that it is a long-term process. Don’t be jolted by short term volatile events like this pandemic and withdraw your money because markets are resilient and your patience will pay off in the long run. 

High-Yielding Savings Account

  • For those who are wary of the stock market’s uncertainty, savings accounts are an equally good option. 
  • Online banks, also known as virtual banks because they don’t have any physical branches and exist solely online, are a better option here. 
  • This is because they have very few overhead costs to meet and are therefore able to consistently offer higher interest rates that are above the national average. 

Real Estate 

  • This is a popular investment class. A lot of people prefer it because unlike stocks and bonds, it is a tangible asset. 
  • Real estate gives people the sense of ownership and its value appreciates over time. 
  • However, the only major hurdle with real estate investments is the cost of maintaining it. 

Claim Your Tax Credits

If you are charged more tax than you are actually liable to pay then the excess amount is made available as a tax credit. This credit can later on be adjusted against any future tax liabilities, i.e. the credit is entirely deductible from the amount of tax you have to pay, and this is regardless of the tax bracket you fall into. So make sure to claim your tax credits. 

Invest in a Rich Life

At this point, what is there left to do but to pick one or two of these methods to begin with and get started? As they say, the best time to plant a tree is 10 years ago. The second best time is now. Take advantage of the present and invest in your future, cultivating your tree of financial stability starting today, starting with freeing yourself from debt.

If you are thirsty for even more information on these main points and how to make your money work for you through successful personal finance management, your next step should be digging through My Ultimate Guide to Personal Finance. Learn how to change your mindset and change your financial life through strategy and a different way of thinking about money.