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So many women out there would never put financially savvy under their list of skills. It’s something all women want, but few think they have the capabilities to master. And it’s my goal to change that, starting with this list of how to make your money work for you!

Of course, we all want our money to work harder than we do. While budgeting may be the best place to start, taking the time to sit down and carefully plan out where to put your money can be just as useful.

Many people think you need to have zero debt and some savings before you can start investing. That’s simply not true. You don’t need a ton of money to get started. All you need to do is raise your money confidence.

But what do I mean when I say how to make your money work for you? By using your money effectively, it can grow without you needing to do a single thing. That means no side hustle or extra hours necessary in order to meet your financial goals. Because after all, you’re already burnt out as is!

The key to making your money work for you is by setting up passive income streams and diversifying the way you make an income. This list presents some options that can get you started by doing more with your money. Try one or try them all!

1. Open a high yield savings account.

Everybody knows the importance of saving and having a basic savings account. But when it comes to savings accounts, you earn basically little to no interest. Unless you intend on spending it soon, money should never just sit there! That’s a wasted opportunity.

A high yield savings account earns more interest than the national average. In fact, it’s about 20-25 times higher. This will vary from bank to bank, but online banks will usually give you the best option since they have low overhead costs.

This is a low-risk way to try and earn some additional interest for those who may be more risk-averse. The money is still easily accessible if you need it, but you’re still stashing it away and doing a little more than just saving your money.

If you have a hard time with saving, consider automating it. Set up automatic deposits, even if it’s just $25 a month, to ensure you’re saving a little bit regularly. It’s practically money you never knew you had!

2. How to make your money work for you by investing.

The best way to grow your money without putting in any additional work is by investing it. The idea of investing is daunting for some, with many people seeing it as too complicated or risky to put their money in. But I want you to change that thinking!

The goal is to outrun inflation, the rising cost of goods and services. You need to make money and get high enough returns that equal out to be more than the annual rate of inflation. Even if your money is growing every year, it needs to be beating inflation.

Ideally, you want to set up passive investing. This is where you leave your money alone for a long time and ignore the ups and the downs of the market. It tries to mirror a financial sector or index over this extended time. Not actively managed by an advisor, they also tend to have low management fees.

Want a little encouragement to get started? Check out this post filled with 44 quotes about investing that will motivate and challenge you

Stock Market

When it comes to stock market investing, the first thing to ask yourself is how much money you would like to invest and your level of risk. While it may seem scary, the best time to invest is when the market is down. Then, you can watch your money grow when the market returns.

You don’t necessarily have to buy and sell individual stocks. Hold onto them for the long run and let things slowly grow. You can even look for ones with dividends to pay out money on an annual basis. Just remember, don’t get scared and pull out your stocks when the market dips. It will always come back.

Mutual Funds And Index Funds

For beginners or those who would rather pass on the investing work to someone else, mutual funds are a great option. Managed by a professional, they invest in a group of diversified stocks using the pooled money of those who invested in the mutual fund.

Index funds are similar, except that they hold assets in a specific market index, like the S&P 500. Both appreciate over time, take little effort and planning on your end, and work best for long-term investors.

ETF

Like mutual funds, ETFs require you to pool your money for investing. The difference is you buy shares of ETFs rather than individual stocks. This is also better suited for long-term investors.

3. Pay off debt.

When you think of earning money, you don’t really think amount giving it away to pay off debt. But paying off debt is so important in how to make your money work for you.

You can waste a lot of money by paying interest, and even if you’re paying off part of your debt, it feels like it never goes down. And we all know how frustrating that can be!

The sooner you pay off debt, the less interest you pay. But how do you start? Paying off high-interest debt should be the first priority. Most often, this is credit card debt. Pay as much as you can for every bill, always making sure to pay more than the minimum payment. The goal is to pay it in full every time.

When it comes to low-interest debt, such as a mortgage, this is less of a concern. Yes, you can pay this back slowly over time (making your necessary payments), but you’re better off putting any of your extra money into investments. This will grow your money and keep up with inflation rather than just sending it away immediately.

4. How to make your money work for you with cashback rewards.

If you’re spending money, you may as well get a little bit extra back in return! Most credit cards will offer some kind of reward system as an incentive to get you to sign up for your credit card. This can be as a sign-up bonus or every time you swipe.

So if you’re spending money, whether that’s on the weekly grocery haul or a new pair of shoes you couldn’t resist, put it on a credit card that is earning you something in return.

Think about what works for your lifestyle. Do you like to travel? Want discounts? Or earn cashback for your purchases? Take a look around at different credit cards from different banks and find which rewards are the best fit for you.

Of course, be mindful about spending when it comes to using credit cards and always keep within your budget. Make sure to pay off your full balance every month.

5. Invest in real estate.

If you already have some investments or a portfolio of some kind, real estate may be the next step in diversifying your assets. It’s also best for those with some extra cash burning a hole in their pocket and ready for a larger investment.

The longer you hold onto your real estate investment, the better the payoff will be. The best part about real estate is that there are lots of ways to invest and make money.

You can buy a single house and rent it out, using the income to pay off the mortgage and maybe then some. Or perhaps you have an untapped talent for flipping, where you renovate a house and sell it for a profit. Maybe Airbnb is your next calling, renting out vacation rentals. Essentially, you can earn income from either rentals or future selling.

6. Save for retirement.

You will always hear me preaching this to the choir: Everybody, no matter your age, should be saving up for retirement. No longer can we depend on earning a pension for our retirement. Too many people leave it until it’s they’re the age where they start to think about retirement.

Retirement requires a hefty amount of money to ensure you maintain the same standard of living. And the last thing you want is to be working longer than you should.

Start as early as possible. The earlier you invest, the more interest you will earn. If you’re self-employed, it’s so important to make your own retirement fund. Most choose to invest in a Roth IRA, a specialty retirement account where you pay the taxes on the money before it goes into an account, then allowing any withdrawals to be tax-free. A financial advisor can help you find the best account for your needs.

If your employer has a 401(k), take advantage and make sure to make contributions. Turn in the max amount if the employer will match it. Younger employees may want to save for other financial goals instead, but they should still make some contributions regularly. That’s free money right there!