How to put your money to work

Getting your money to work for you will require a bit of effort, especially if your money-management practices weren’t the best to start with.

Like it or not, money is a crucial consideration for everyone not matter how much they claim, money doesn’t buy happiness! 

Most of us have developed a mindset where we work hard for our money, and in which cash management became a dominating factor and this realty hit home for over a million Australians who deferred their mortgage repayments when the pandemic hit their cashflow.

In reality, however, you can to get your money to work for you. Developing these smart practices with your personal finances will ultimately help you enjoy financial stability.

1. Tax yourself

Few things are more important than saving for the future, yet so many of us struggle to do this. They worry about paying bills or waste money on frivolous expenses before they even think about saving.

Think of your monthly savings as the equivalent of taxing yourself. Putting money into savings is mandatory and should always be one of your top priorities.

Consider setting up automatic transfers to a savings account each month. Set a goal of saving 10 percent of your income, which will grow over the years without the need for additional management.

2. Use experienced advisors 

Too many people allow emotion or "gut feelings" to take over their investment mentality. Investors should remove emotion from this process, as this often leads to knee-jerk decisions based on headlines or hearsay. 

Instead, engage a trusted financial advisor who will emphasis risk management, backed by sound research when making investment recommendations.

You can still need to make the final decision to buy or sell, but with emotion out of the picture, they are much less likely to make a catastrophic mistake.

Check how your home loan compares

3. Reduce your biggest debt

Despite a decline in credit card debt, property related borrowing is on the rise. Sure, taking on a mortgage debt can help you purchase a home now. But with ever increasing property prices, mortgage size is also on the rise.

Making sure that you have a competitive home loan will enable you redirect your savings towards reducing your home loan balance fast.

Getting your money to work for you will require a bit of effort, especially if you intend to chase lenders and spent time on comparison sites confirming that your biggest debt has a competitive rate.

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This article does not constitute advice; readers should seek independent and personalised counsel from a trusted adviser that specialises in property, a tax accountant and property design specialist.