Unless you can print money like the federal government does, you only make so much money; making that money work for you is crucial to getting ahead financially or staying behind.

The key to having enough money is learning the proper way to manage it.

How To Make Your Money Work For You

Step #1 – Take Advantage of Tax Deferral Investments

Investing in tax deferred investments makes your money work for you because tax deferral either lowers your taxes or it increases the amount of income you get to keep.  Either way is a positive effect on your bottom line.

What qualifies as a tax deferred investment would be your Individual Retirement Account, 401k account, 403b or 457 accounts and perhaps a tax deferred annuity account.

Step #2 – Have An Investment Strategy

An investment strategy is not so much about picking the right stocks and bonds and mutual funds but more about spreading your investments out and having the ability to rebound.  If you diversify your investments, you can offset the market volatility.   If your investment assets are diversified you will be able to rebound more quickly.

If you don’t have the time or interest to manage your investments, that’s okay, just get help.   A financial planner can help you with your investment choices and the asset allocation of your accounts.  A financial planner can make professional recommendations on how to best diversify your investments.

Part of any investment strategy should be to set up automatic monthly deposits directly into your 401k account or other investment accounts.  With automatic deposits, you will not miss the money and it will grow with little effort.

Step #3  – Plan Ahead – Are You Saving Enough Money For Retirement?

For a comfortable retirement, financial planners say that you will need at least 85% of your pre-retirement income.  That percentage will be less of course if you have to continue working during your retirement years.

If you have to keep working past the age you set to retire at, it’s not all that bad.  By working longer you will have more time to accumulate retirement assets.   Theoretically your Social Security benefits should be higher if you delay collecting Social Security because you continue to work.   And by continuing to work you lower the number of years that you will have to rely on Social Security as a source for retirement money.

Debt gets in the way of having your money work for you.   Financial planners tell their clients that you must pay down as much of your debt as you possibly can before retiring.  That is great advice.