As the old saying goes, money makes the world go round. It may be a cliché but it does hold a lot of truth about the importance of making money. A lot of people are not knowledgeable about personal finance thus they often find themselves deep into their financial problems without seeing any light at the end of their dark tunnel. Some of them have to restructure their debts while some people file for bankruptcy. If only they are careful with their money, they wouldn’t have encountered a lot of difficulties.

At any point in your life, making money must be one of your priorities because it will pay your daily living expenses, emergencies, and other financial needs. Before you start making money, you have to examine your spending habits last month so that you’ll know how you spend your money. By knowing your expenditures, you’ll be able to decide which expenses you have to cut back in order to add to your savings. There are some banks which provide money tracking online for free and there are also money-tracking tools from various websites.

Part of your making money strategy is finding out how much money you need for retirement. As a rule of thumb, you can multiply your present annual salary by 12. You have to ensure that you save that amount of money before you retire. You have to plan how you’ll be able to raise the needed amount of money. Also, you have to check investment fees your current retirement accounts are charging you. You may opt to transfer your money to a retirement account which offers low fees as part of your making money strategy.

Another strategy in making money is to take advantage of every tax breaks made available to you. IRAs and 401(k)s provide various tax advantages. You may also ask your HRD head if there are employee benefits which you may not be fully taking advantage of. Every quarter, you also have to check your portfolio because your risk appetite may change. For those in their 30s, their financial portfolio may include 70% stocks and 30% bonds or other conservative investments. For those in their 60s, their financial portfolio may be reversed. Eventually, people will need to change their lifestyle in order to increase their rate of personal savings.

For people in their 20s and 30s, it is important to have a will as well as healthcare proxy documents and power of attorney. Part of personal finance is ensuring that each individual has a life insurance especially when there are dependents involved. Making money at this age involves increasing the rate of savings until the personal goal percentage is reached. A 20-year-old individual may opt for a 20% savings rate. Debts must be put at bay and paid on time. In case there is a huge credit card debt, a person must ensure that he is aggressive in paying the debt off as part of his making money strategy.

Personal finance for people in their 40s and 50s include analysis of the kind of support given to family members, especially to adult children and parents, because such support may have a negative impact of the person’s making money ability and financial security. It may make sense to find other ways to support the family members. For those with at least $50,000 assets, it may be best to take a long-term care insurance so that a nursing-home care or assisted living can be taken advantage of when needed.

Even individuals at least 60 years old can still have their own making money strategies. They may purchase an annuity as a way of making money even in old age. The annuity can offer additional financial security, especially for those without pensions. Making money during old age may include continuously working even in retirement. As much as possible, benefits from Social Security must be delayed in order to maximize the payments.