How to Use Money

Save your wealth to protect your financial future.

Cash as well as debit and credit payments are a few of the payment options available to consumers. Learn how to use money to purchase the goods and services you need. Effective money management requires some planning; however anyone can do it, even consumers dealing with large financial debts. By regaining control of your finances, you can begin to save and spend your wealth in the most effective ways possible.

Instructions

1. Finance daily purchases. Use money to pay for daily expenses such as food, clothing, auto maintenance, medicine and entertainment.

2. Finance large purchases. Many hospital and health care providers, for example, offer discounts for cash payments. When purchasing a high price service, ask about discounts for cash payments.

3. Invest in your future. Make deposits into a pension or retirement account using money taken directly from a paycheck. You can also make cash deposits through a 401(k) manager.

4. Pay down pre-existing debts. An outstanding debt can adversely affect your credit rating and raise your debt-to-income ratio. Use earned income to pay down debts to within 30 percent of your credit limit.

5. Build financial security with an eight month's emergency fund. (Deposit the money into a savings account to accrue interest.) Unexpected job loss, illness and death are examples of emergency situations that can require large sums of money.

Tips & Warnings

• Keep receipts and invoices for your records.

References

• "Oprah: Suze Orman's Twelve Steps to Wealth"
• Suze Orman: Managing Debt
• Bank Rate: Pay Cash and Ask for a Discount
• Bank Rate: Everything to Know About Retirement Accounts