Money is a powerful tool with the potential to help us reach our financial goals and create the lifestyle we desire. However, simply earning money won’t create wealth; your money should operate as a vehicle that actively contributes to your financial well-being.
At Matarazzo Staiger Wealth Management, we know that managing your personal finances can be overwhelming, so we commit to using all our resources to help you pursue your goals. To assist you in making the most of your money, we have compiled the top 10 tips to keep your money working for you as you navigate your wealth-building journey.
The first step is to set clear financial goals; after all, you can’t make your money work for you if you don’t know where you want to go! Make sure your goals are specific, measurable, and realistic. Common financial goals include saving for a down payment on a house, paying off debt, building up an emergency fund, and achieving your ideal retirement lifestyle. Once you have a clear goal in mind, you can create a plan to get there and manage your money in ways that will work toward your ultimate goal.
Next, you’ll want to create and stick to a budget. If identifying your goals and outlining a plan is the map, the budget is the actual route you take to get to your end goal. Budgeting often has a negative stigma associated with it. There’s a persistent belief that only people who are barely getting by need to budget, but this is so far from the truth. Those who consistently budget often make better decisions with their money and achieve their financial goals faster.
To create a budget, you must understand your income and expenses and allocate your money in ways that align with your financial goals. The first step is identifying areas where you may be overspending, allowing you to redirect those funds toward savings or investments.
Put simply, revolving high-interest debt is the archenemy of making your money work for you. It is the villain in your fairy tale story, and it should be avoided as much as possible. If you have high-interest debt, such as credit card debt, paying it off should be your top priority. If left to accumulate, it can be incredibly challenging to make progress toward your financial goals. Consider consolidating your debt or using the snowball or avalanche method to pay it off systematically.
Automating your finances can be a powerful tool for making your money work for you. Setting up automatic transfers from your checking account to your savings or retirement accounts allows you to consistently save and invest without even having to think about it. You can also automate bills to ensure you never miss a payment and avoid late fees. Automating your finances not only saves you time and effort but also helps you stay on track toward your financial goals. Just be sure to monitor your accounts regularly to keep everything running smoothly.
This tip can be a great way to make your money work for you, but it should be used with caution and not as a way to live beyond your means. Many credit cards offer cash back, points, or miles for every dollar you spend, which can add up to significant rewards over time. Using these cards for everyday expenses you have to pay regardless can be a powerful way to make your money stretch further.
It’s crucial to use this strategy responsibly and pay off the balance in full each month to avoid interest charges and debt. By paying off your balance each month, you can enjoy the benefits of a rewards credit card without incurring any additional costs. Compare different cards and their rewards programs to find one that fits your spending habits and financial goals.
One of the easiest ways to make your money work for you is by putting it into a high-yield savings account. These accounts offer competitive interest rates and allow you to earn more on your liquid cash assets (like an emergency fund) without subjecting them to the volatility of the stock market. Start by comparing different banks and their interest rates, fees, and other features to find a high-yield savings account that suits your needs. While the interest earned on a savings account may not be as high as other investment options, it provides a low-risk way to earn passive income on your savings.
If your employer offers a retirement savings plan, such as a 401(k) or 403(b), don’t neglect to take advantage of any matching contributions. Employer matching contributions are essentially free money that can significantly boost your retirement savings. For example, your employer may offer a 50% match on the first 6% you contribute. If you earn $75,000 and contribute the full 6%, your employer will contribute an additional $2,250 to your retirement account. That’s an extra $2,250 toward your retirement that you didn’t have to earn or invest on your own! Be sure to contribute enough to your retirement account to maximize any employer-matching contributions, as it can make a big difference in the long run.
Regularly reviewing your asset allocation is an important component of any solid investment strategy. The markets have experienced considerable volatility over the past two years, and this turbulence may have shifted the allocation of your portfolio. Reassessing how your assets are positioned helps keep your portfolio aligned with your current risk tolerance and investment goals.
Also, because you are now two years closer to retirement, you may want to acknowledge any shifts in your financial objectives. Goals may have evolved, priorities could have changed, and you’ll want your portfolio to reflect these adjustments to optimize its effectiveness in meeting your evolving needs.
Lastly, consider investing in yourself as a way to make your money work for you. Whether it’s learning a new skill, taking a course, or pursuing further education, investing in yourself can improve your earning potential and help you achieve your financial goals. By continuously developing your skills and knowledge, you can become more valuable to employers or clients, increase your income, and build a stronger financial foundation for yourself.
Additionally, investing in your health and well-being through exercise or nutrition can lead to long-term savings on healthcare costs and improve your overall quality of life. Be sure to prioritize investing in yourself as part of your overall financial plan.
Transforming your money into a powerful asset might seem challenging at first, but adopting the right mindset with guidance to steer you in the direction of success can make all the difference.
Because wealth is a gradual process, we at Matarazzo Staiger Wealth Management work to break it down into manageable steps while implementing them into a custom strategy aligned with your needs. With a focused commitment and skilled support, you can create a stable financial future for yourself and your loved ones. Reach out today to set your money in motion by scheduling a no-obligation introductory meeting, emailing me at daniel.staiger@raymondjames.com, or calling (631) 319-6777.
Daniel Staiger is a partner at Matarazzo Staiger Wealth Management and Financial Advisor with Raymond James Financial Services. Matarazzo Staiger Wealth Management is an Independent Practice and our team is committed to helping families, pre-retirees, and union employees build a sense of security and confidence around their financial future. With more than 10 years of experience, Daniel is dedicated to providing trusted advice and tailored solutions that help his clients realize their financial potential. He is known for building relationships with his clients so he can better understand their values and the goals they want to pursue. As a CERTIFIED FINANCIAL PLANNER™ and Chartered Retirement Planning Counselor℠ professional, Daniel specializes in serving union employees, such as tradespeople and teachers, with well-thought-out guidance and a personal touch. When he’s not working, Daniel spends his time pursuing interests such as guitar, volleyball, golf, and cooking. He is also an active member of his church. To learn more about Daniel, connect with him on LinkedIn.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.
Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Prior to making an investment decision, please consult with your financial advisor about your individual situation.
Any opinions are those of Daniel Staiger and not necessarily those of Raymond James Financial Services, Inc., or of Raymond James. The information contained does not purport to be a complete description of the securities, markets, or developments referred to in this material. There is no assurance any of the trends mentioned will continue or forecasts will occur. The information has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Matching contributions from your employer may be subject to a vesting schedule. Please consult with your financial advisor for more information.
