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How to Make Money Work for You – What Every Young Adult Must Learn

Every young adult knows that money is a powerful tool for creating the life they dream of. However, most young people think of the extra cash in their checking account as something to have fun with, rather than a tool for investing in their future.

There are tons of moves that can be made when you have a good cash flow, such as real estate investing, investing in the stock market, starting a retirement account, and starting an investment portfolio for the future.

These may not sound important when you’re young. However, if you get well acquainted with some solid personal finance tips when you’re young, you can learn how to make money work for you and get on the path to financial freedom.

This article will show you the most important monetary skills to master if you want to make this powerful tool – money – work for you.

Taking Control of Your Finances

Here’s a simple way to explain what it means to make money work for you. It is developing the capacity or skill to take control of your finances and using that money management knowledge to make sure you can reach your financial goals.

Gaining this all-important skill goes beyond memorizing a definition to taking practical real-world steps. Now, let’s get into the hands-on tips that can help you learn exactly how to make money work for you.

Budget Before You Spend

If you want to learn better ways to use your money, you should first know where the money in your income stream is going.

A budget is an essential money tool that helps you get a better handle on your money. Budgeting allows you to quickly determine the earned income you have coming to you, and to be more deliberate and purposeful about how you spend the money. 

In this sense, a budget makes your money do precisely what you intend instead of spending on a whim or without a concrete plan.

Here is a small list of things you can use a budget for:

  • Prioritize your spending
  • Identify unhelpful financial habits
  • Reduce your spending
  • Pay off your debt
  • Stay away from incurring new debt
  • Save for the future

Always remember that the ultimate goal of a budget is to spend less than your income.

But how do you go about creating a good budget? It’s a lot simpler than many young people imagine.

Every month, take a look at your earnings- your passive income, residual income, and any extra income that may come into your bank account.

Assign every dollar you earn or expect to earn to the different categories of living expenses you have monthly or weekly, depending on your preference.

Here’s a common mistake many people (both old and young) make: they only look at their budget once a month. It’s okay to amend your budget from month to month but budgeting is not a one-off thing.

Cultivate the habit of actively going through your budget as often as possible. The more times you can revisit your budget the better grip you will have about your spending habits.

This is the first step in learning how to make money work for you and taking charge of your finances, instead of living at the mercy of money.

Get Out of Debt

When you are in debt, interest payments can substantially eat into your income and push you into more debts. It’s not uncommon for young people to struggle with credit card debt, as learning about how an interest rate works, and strategies to pay it off can be confusing.

Unfortunately, your choices are limited when you are in debt, and you will live under financial burdens. If not taken seriously, your credit score can suffer and lead to even more issues as you move into the future. Every young adult who aims to enjoy financial stability and security must take steps to get out of debt very quickly.

Once you pay off your debt you can save toward your education, improve your living condition, start an investment strategy, or even create an early retirement fund! Without debt, there will be much more freedom with what you can do with your money.

Here’s a simple two-step method to start an effective debt repayment process:

  • Start by paying off the loan with the highest interest rate, especially if it has compound interest
  • Only make minimum payments on your debts until you can pay off larger sums

Set Aside Some Money for Emergencies

Learning how to make money work for you is incomplete without a lesson in creating an emergency fund.

You will be surprised at the number of people who got swept back into more debt because of unforeseen financial situations. A job loss, an urgent medical procedure, or an unexpected car repair can wipe out all your hard work toward taking charge of your money if you don’t stow away some cash for financial emergencies.

Making plans for emergencies puts you in control of your money because if an emergency doesn’t come up, the money can go toward other goals. That’s another way to make money work for you.

But creating an emergency fund takes a while, so don’t put aside money for eventualities that will make you live meagerly in the present.

It is best to have up to six month’s worth of your income in an emergency fund, but you should do this gradually. Consider opening a high yield savings account where your savings can grow over time.

Save Money

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Invest, Save, and then Spend What’s Left

You don’t have to aspire to be the next Warren Buffett before you learn the basics of investing. Everything we’ve talked about so far ties in nicely into savings and investment to make you financially stable.

To start your investor journey, create a feasible financial plan using a budget to get out of debt and manage your debts. Next, you stow away some cash weekly or monthly against surprises. Lastly, you can make your money work for you through investments and savings.

No matter how vibrant you are when you’re young, you certainly can’t work all your life. Savings and investments will help you afford the lifestyle you want after you retire from working actively without needing to depend on family and friends.

Instead of paying interest (and losing money), investing makes you earn interest. That’s the beauty of a passive income like this- your money is making extra money without you lifting a finger.

However, it is important to keep in mind that investing is a passive income stream that builds money in the long-term. It makes sense to start an investment account early so that you can watch your money grow for several decades before spending it.


Hopefully, you’ve learned how to make money work for you from this post. Budgeting, paying off debts, creating an emergency fund, and investing are the money tools you need to be in control of your finances.

As you practice these skills, you will improve your chances of creating a better financial future.