Life is busy, and seemingly getting busier. You work hard to earn a living – probably well and truly over and above what your boss’ basic expectations are. Or you’re a stay-at-home parent working crazy hours taking care of a home and family.

But you’ve also made time to read this article, because you know that some judicious financial decisions can make your future self a lot better off. And you’re dead right. Below are six ways you can make your money work harder – for you. And it’s good (and profitable!) to be the boss!

  • Take control You can’t make something work for you until you’ve taken control of it. I mean really taken control. You can do a few things to help earn more, but a lot more when it comes to what you do with each pay packet. Make a budget. Stick to it. And pay yourself first – make sure putting a little (or a lot!) away for the future is your number one objective. Once you have a flowing stream of savings coming your way, you’re ready to put it to work.
  • Pay less on your mortgage If you have a mortgage, you’re probably paying 5 per cent. If you’re paying even 0.1 per cent more, you’re paying too much (and depending on your circumstances, you can beat 5 per cent easily). There’s no better way to get your money working hard than by simply paying less in mortgage interest. And once you’re paying less, make sure your extra savings are in a no-fee mortgage-offset account. No matter how much you get in a high-return savings account, you’ll do (much) better after-tax by using an offset account.
  • Open a high-interest savings account No mortgage? You’re not off the hook. It is literally easier than ever to maximise the return on your savings. It’s true that official interest rates (and therefore the rates you’ll likely earn on your cash) are at historic lows – but that’s no excuse to accept lower interest than you can get elsewhere. Put “high interest savings accounts” into Google, look past the ads, and you’ll see a couple of websites that compare high-interest, at-call savings accounts. Just make sure you don’t fall for their “honeymoon rates”!
  • Invest If you like the idea of your money working for you by earning interest even while you’re asleep, you’ll love the idea of doing that, but on steroids. Having your money working for you is one thing, but what about having 200,000 people on your personal staff? Okay, so maybe not your personal staff, but you can have a share of their best efforts by owning shares in, say, Wesfarmers from which those numbers come. Or the 128,000 people who work for BHP. The people who work for Australia’s ASX-listed companies have turned a $10,000 investment into a $280,000 pile over the past 30 years!
  • Pay less tax Australia’s tax system is ridiculously large and complex. But don’t let that complexity stop you from claiming all of the tax deductions you’re entitled to. Accountants get a tough rap, but a good one is well and truly worth her fee. Make an appointment today, and see if you get a nice little refund cheque from our friends at the ATO at the end of each year.

Get even more money from the ATO

Dividend ‘franking’ is one of the great free-kicks available to Australian investors. If you earn $100 in interest this year, you’ll lose a chunk in tax (depending on your marginal tax rate). But if you receive $100 in fully-franked dividends, you’ll lose much, much less – and you might even get an extra cheque from the tax man. That’s because the tax paid by companies can reduce your tax bill! Either way, fully-franked dividends beat interest, hands down!

Foolish takeaway

Hopefully that list gives you a great starting point – and we haven’t even touched credit cards, personal loans, utility bills and a host of other opportunities to save more money in the first place. A financially prosperous future is within your grasp – you just need to take it.

Posted by Scott Phillips – Money Manager (Fairfax) on 26th November, 2014