8 Ways to Make Your Money Work for You

Money is a powerful tool.

While some like to say it’s the root of all evil, the truth is proper money management can help you create your dream life.

But that doesn’t mean doing so is easy.

Taking control of your money requires a lot of discipline and effort, at least initially.

If you’re ready to get hold of your finances, here are eight powerful ways to make your money work for you.

How to Make Money Work for You: Powerful Strategies

1. Eliminate Wasteful Spending
2. Start an Emergency Fund
3. Pay Off High-Interest Debt
4. Take Advantage of Your 401k Match
5. Invest in Passive Income Sources
6. Use Your Money to Fund a Side Business
7. House Hack
8. Automate as Much as You Can

1. Eliminate Wasteful Spending

The word budget can drum up negative feelings in even the most financially responsible. After all, who wants to spend their time tracking every penny?

Not me. And probably not you.

But here’s some good news – you don’t have to.

While you absolutely need to know where your money is going every month, you don’t have to cut out every small purchase, especially if it brings you happiness.

Instead, pull out your bank statements and look at where your money has been going. 

If you’re paying for subscriptions you don’t use, cancel them. If you see that your car payment takes up a quarter of your income, do something about it.

We all fall victim to mindless, wasteful spending. Take an inventory of your finances and plug the holes. 

After you go through your spending and make some changes, your expenses should be less than your income. If not, you’ve got some more work to do. 

2. Start an Emergency Fund

If you don’t already have an emergency fund, starting one is a good idea.

An emergency fund is simply a savings account that has enough money to tide you over for 3-6 months in the case of a job loss or actual emergency.

One-third of Americans have $1,000 or less in their savings accounts – you don’t want this to be you.

Save up some money so that when unexpected expenses come up, they’re slight inconveniences rather than major emergencies.

3. Pay Off High-Interest Debt

There’s some controversy about whether you should invest if you’re in debt. 

But, one thing is for sure, if you’re in high-interest debt, you need to pay it off. High-interest debt usually comes from credit cards, predatory lenders, unsecured private loans, and buy here pay here type places.

So, look at all of your high-interest debt, and if the rates are higher than, say, 7%, make a plan to pay them off as quickly as you can.

After you pay them off, you can funnel those payments into your passive income sources. 

4. Take Advantage of Your 401k Match

Does your employer offer a 401k plan?

Some employers will match the money you put into your 401k up to a certain percentage. For instance, if you put 5% of your paycheck in your account, they’ll add a matching 5%.

This match will instantly double your money, plus since it’s invested, it will also continue to grow, which may result in substantial long-term gains.

Don’t pass up on a 401k match – it’s free money.

5. Invest in Passive Income Sources

Passive income is the ultimate goal for financial success. It allows you to earn money without your direct input.

In fact, the definition of passive income is earnings in which a person is not actively involved.

That means while you’re sleeping, eating, or working your regular job, the money you have invested makes money of its own.

But all forms of passive income are not created equally.

To earn passive income, you must invest your money or your time. 

Here are the most common sources of passive income:

Stock Market Investments 

If you participate in your employer’s 401k program or have an IRA, you’ve probably invested in the stock market. 

The stock market is a giant exchange of publicly traded companies and financial securities. One of the lowest risk ways to get started with stock market investing is to invest in an ETF (exchange-traded fund.)

ETFs are comprised of investments into several companies and sometimes even bonds. Since ETFs allow you to spread your money over several investments, they’re far less risky than putting your money behind only one company.

However, you can also purchase individual stocks if that’s something you’d like to do. It’s a bit riskier, but investing in popular companies with a strong track record can be a reliable way to grow your money over time.

Real Estate

There’s no doubt owning real estate can be a great benefit to your financial success. 

The two main ways to make money with real estate include earning money from rental payments or appreciation.

Appreciation happens when the value of the real estate you purchased goes up, which usually happens over several years. You can make money through rental payments as long as the rent you charge is higher than your mortgage, insurance, and other associated costs.

But of course, like anything else, you can lose money in real estate if you don’t make smart purchases.

Try a REIT

If you love the idea of real estate but don’t want to worry about tenants or market swings, there is another way to invest: REITs.

REITs are real estate investment trusts. By investing in a REIT, your money goes toward companies that own or invest in a large number of income-producing properties. 

REITs allow you to invest in real estate without actually having to buy property.


Crypto trading is among the most volatile ways to invest since it’s pretty new and unregulated. Still, it can prove to be a great way to earn passive income if you’re risk-tolerant.

You’ll likely see large fluctuations in crypto markets, and if you decide to put money in cryptocurrencies, you need to have a strong understanding of what you’re investing in.

Creating Passive Income by Building an Asset

As I mentioned earlier, there are two ways to earn passive income: investing your money or your time.

If you’re short on cash but have a lot of time, you can create something that you only have to do once and still get paid for over and over.

Some of these passive side hustle ideas include:

  • Writing and selling ebooks
  • Creating a digital course
  • Earning royalties from music
  • Earning royalties with the Amazon merch program
  • Building an informational blog that earns with ads
  • Making YouTube videos 

6. Use Your Money to Fund a Side Business

The biggest downside to working a standard 9-5 job is that your earnings aren’t unlimited. Instead, you work X number of hours and receive X number of dollars.

So, if you want to increase your earnings, one of the best ways to do it is with a side business.

Your side business can be anything you’re good at that you can charge money for. And the great thing about side businesses is that, depending on what you choose, you don’t need a ton of capital to get started.

For instance, if you want to offer something service-based like web design, writing, virtual assisting, or affiliate marketing, all you need is money for a website and possibly a few tools.

If you have no money to invest right now, you can start a simple side hustle like getting paid to listen to music or taking on typing jobs. You can get started with these for nothing and use the proceeds to go into a higher-paying side business idea.

7. House Hack

If you want to stretch every dollar as far as possible and possibly have your mortgage covered, consider house hacking.

With house hacking, you purchase a property that has at least two living spaces. (For example, a duplex or a house with a basement apartment.) 

Then, you live in one of these units and rent the other. 

Depending on the area you live in, you may be able to charge enough rent to cover the entire mortgage – meaning you get a place to live for free while paying down your principal balance.

Of course, this can be extremely hard to do if you have a family or an existing mortgage, but if you’re child-free, this idea will definitely make your money work for you. 

And then, when you decide to move, you can rent out the unit you were living in.

8. Automate as Much as You Can

Habits are hard to establish, especially in the beginning.

If you’re trying to save or invest more money, make it automatic. When you automate your investments, there’s no internal battle deciding if your money should go toward passive income streams or something more fun and appealing at the time.

Because the truth is, there will always be more fun things to spend your money on. 

But if you’re trying to create financial success, you need to stick with your plan until you reach your goals.

And automating is a great way to do this.

Final Thoughts

There are many ways to make your money work for you, which is great since we all have different interests and risk tolerances.

No matter where you’re at financially, the best place to get started is to eliminate unnecessary or wasteful spending. (And no, that doesn’t mean you have to give up your morning Starbucks if that’s something you love.)

After you’ve eliminated wasteful spending, decide how you’d like to invest your money. In the long term, creating passive income streams will allow you to build financial security and possibly early retirement. And having a solid side business is a great way to speed up that process as well.

Affiliate Disclaimer: I may (and probably do) receive affiliate commissions from any products I recommend or links I put on this page. My opinions are my own but they are truthful and I do my best to recommend products that I have vetted and/or purchased myself.