You make money, but are you making your money work for you? Many people make the mistake of simply bringing money in and paying it out as necessary. Financial stability goes beyond a decent paying job and a basic bank account. You need a plan to create more wealth and a stable future for yourself and your family.

Pay Off Your Debt

Debt is a financial and stressful weight for most people. Credit card debt eats away at your money; you pay interest and receive nothing in return except the privilege of buying something you didn’t have the cash to pay for.

Even secured debt, such as a car loan, nibbles at your savings. Pay more than the minimum due whenever you can to free yourself from debt early and don’t create more debt if you don’t have to. Minimum payments on your debts are designed to benefit the creditor by maximizing the amount of interest you’ll pay over the life of the debt.

Make a Budget

Budgeting is one of the most important tools you have to reduce debt and save for emergencies and your retirement. An accurate budget will show you exactly where all your money goes each month. Don’t leave out any item, no matter how small you think it is. Small expenses add up over time and you may find you’re spending more on “little” things than you think.

Once you’ve made your budget, decide what you can cut. Budgets are not just meant to give you a picture of your current financial state. A detailed budget will help you find your wasteful spending and encourage you to save more. Even if you can’t cut out an expense entirely, you may be able to reduce the amount by looking for a cheaper service or cutting features.

Save, Save, Save

The most common basic bank account, a checking account, is a convenient way to pay your bills, but money you have sitting in there isn’t working for you. Checking accounts have low or no interest rates. The bank is using your money, but you’re getting only convenience in return.

Open a savings account and start saving immediately. Even if you only can afford to put $10 a week in there, after a year, you’ll have $520 saved. If you have an emergency, you can use your savings to cover it instead of putting yourself into debt by relying on credit cards or loans.

If possible, try to open a savings account that requires you keep a minimum amount in the account at all times, such as $200. If you open an account with a minimum deposit amount, you’ll be less likely to take money out unless the situation is a genuine emergency.