5 ways to make your money work for you

Prioritizing and gaining control over your financial well-being is more important now than ever. A recent LendingClub study revealed 60% of working Americans are living paycheck to paycheck—across all income brackets and age groups.¹  

However, with some planning, it’s possible to make your money stretch further. From budgeting and paying down debt to using high-yield savings accounts and setting your bills to autopay, there are many strategies that can help you put your money to work and meet your financial goals.   

Here’s a closer look at five ways to help maximize your money.  

1. Identify your most important financial goals 

Setting goals can help keep your finances in order. Whether you’re saving for a dream vacation, an emergency fund, or paying off debt, it’s important to clearly define your financial goals. Goals often vary from person to person, depending on age, current place in life, family needs, current income, and even past debt. So, don’t worry if what’s important to you is different from what’s important to others.   

Once you’ve identified your financial goals, you can start taking steps to achieve them and launch a plan to manage your money resources. As you map out your goals, think about your start date, end date, and any key milestones you want to reach along the way. For instance, if your goal is to save up for a wedding, your financial goals may include a mix of saving for the perfect dress, paying a venue in advance, expenses due on the big day, or pre-paying for your honeymoon.²  

Whatever your financial goals, consider using a budget to stay on track. And don’t forget to celebrate meeting mini-goals along the way. If you’re not sure how to prioritize your money goals, a financial professional can help you figure out what’s most important and create a roadmap.  

2. Learn to budget (and stick to it) 

Knowing where your money is going is one of the best ways to make money work for you. Budgets are an important tool for managing your cash and improving your relationship with money. Setting a realistic budget can help you keep your finances on the right path, cover your expenses, track spending, manage debt, and reduce financial stress.³   

However, sticking to a budget isn’t always easy. Many people put off budgeting because it can feel too restrictive or complicated—but it's OK to simplify things. Start by jotting down your income and expenses to see where you stand. Then, create budget categories. You can keep your categories broad, like housing, bills, food, entertainment, savings, and more. Or, drill down into specific areas, such as subscriptions, groceries, takeout food, rent, utilities, and so on.⁴   

Writing your budget on paper (or in a budgeting app) can help you see where you can make cuts without making major sacrifices—freeing up money to pay down debt or boost your savings.  

3. Pay down your debt 

High-interest debt often compounds each month. If you’re carrying credit card debt and only making the minimum payment, it could take many months—or even years—to pay off your original balance. Making a plan to pay off your debt now will free up your funds for a brighter future.⁵   

Two common ways to pay down debt are the debt snowball and debt avalanche methods.   

• Debt snowball method: Using this strategy, you’ll build momentum by paying off smaller debts first. You might extend your payoff timeline and increase your interest costs—but early wins often help people stay motivated when using this method.⁶ 

• Debt avalanche method: With this method, you’ll tackle debt with the highest interest rate first. While you’ll save on interest in the long run, paying down debt with this method often requires ongoing discipline and self-motivation.⁶  

 If you’re tackling multiple debts or saddled with high-interest credit cards, you may want to consider a debt consolidation loan. These loans combine all your debts into one monthly fixed payment—often with a lower interest rate—so you can get out of debt faster and spend less on interest overall.⁷ 

4. Open a high-yield savings account 

If you have to stash your cash somewhere, you might as well earn interest. High-yield savings accounts tend to offer higher interest rates than standard savings accounts, boosting your cash reserves over time.   

Check to see if your current bank offers high-yield savings accounts. Or shop around to compare rates. High-yield savings accounts are typically offered at traditional banks, credit unions, and online financial institutions. Once you have your account set up, consider scheduling automatic transfers from your checking account. These could happen on a weekly or monthly basis, or intervals that work for your budget.   

Many high-yield savings accounts provide tools to help you set up “buckets” for each of your savings goals. For instance, you can set up a bucket for an emergency fund, vacation expenses, or vehicle repairs. And if you choose to schedule automatic transfers, you may be able to designate how much cash goes into each bucket.  

5. Automate bill payments 

Paying bills on time is an important part of managing money. Not only is your payment history a factor in calculating your credit scores, but late payments often result in costly late fees and penalties. To avoid the risk of paying your bills late, consider setting up automatic bill payments. Often you can do this right from your bank account. Or you can set up autopay directly with each account.   

Without late payments to worry about, you can direct more funds to investments or other savings vehicles. And while you’re automating your bill payments, it may also be a good time to automate money transfers. For instance, if you schedule bill payments for the first of each month, you could also set up deposits for your savings or retirement accounts.   

Automatic bill payments (and other types of automatic transfers) can usually be paused or canceled at any time. So if you need to change the date or amount you pay, you'll have flexibility to do so. You can also decide to make extra payments on top of your autopays to help pay debt down faster. For example, if you have your credit card payments set to pay the minimum each month, you can always make an extra payment.⁸ 

The bottom line 

Creating real financial growth in your life may feel a bit overwhelming, but it doesn’t have to be. Practicing good money habits and making small financial moves now can pay off big in the future. Plus, you’ll get the added benefit of watching your money grow and celebrating when you meet your goals.   

1. PYMTS. “PYMNTS Intelligence: 61% of the US Population Living Paycheck to Paycheck.” 

2. Consumer Financial Protection Bureau.”Setting Smart Goals.” 

3. Consumer Financial Protection Bureau. “Budgeting: How to create a budget and stick with it.” 

4. Consumer.gov. “Making a Budget.” 

5. Consumer Financial Protection Bureau. “How to get a handle on debt.” 

6. Consumer Financial Protection Bureau. “How to reduce your debt.” 

7. Consumer Financial Protection Bureau. “What do I need to know about consolidating my credit card debt?” 

8. Consumer Financial Protection Bureau. “Ways to pay your bills.”