Financial Strategies For Average Income Earners

A huge portion of the population belongs to the average income earners bracket. This income bracket is typically defined as having accumulated around $50,000 to $70,000 annually. If you find yourself belonging to this income bracket, then you might be able to agree that it definitely requires extensive planning to be able to work with this budget. Most of the time, people don’t even plan for their finances because they are too occupied with having to work all the time just to make ends meet. However, we argue that financial planning is crucial in improving your financial position. 

In this article, we are going to explore some of the most ideal financial strategies for average-income earners. This list will include concepts on cash flow recording, prioritization of funds, budgeting, and making low-risk investments. In line with making low-risk investments, you should definitely consider investing in certificates of deposit (CD). Specifically, we recommend that you check out CIT Bank CD rates for the CDs with high-interest rates and no early withdrawal penalties.

Cash Flow Recording

The first and perhaps most important strategy to have is to be able to effectively record your cash flow. Cash flow recording entails having to keep track and record all cash transactions, both in the receipt and disbursement of cash. Cash flow is a core component of financial management because it enables you to monitor the movement of cash. On top of this, it also shows you how fast your cash turns over. If your cash on hand depletes as fast as you manage to receive it, then you have a high cash turnover rate. 

Having a high cash turnover rate may indicate either overspending or that your income simply cannot match your expenses. This will serve as a basis for reevaluating your expenses to see how you can lower your cash turnover rate. In contrast, if you have a very low cash turnover rate, it may be indicative of poor cash management. In such a scenario, you may be keeping too much cash in your pocket or bank account, which makes your money more prone to inflation. By recording your cash flow, you can better manage your cash to find a healthy balance between having cash on hand for emergency purposes and using your cash to earn money through investments.

Prioritization of Funds

Similar to setting basic goals, you should also know how to prioritize your financial resources. If you haven’t done this already, you should take some time off to reevaluate your financial goals. During this process, we recommend that you identify at least five aspects of your life that requires financial resources. Then, you can create a hierarchy of priority for these aspects to determine which ones are more important to you in relation to your goal. After having evaluated your financial goals, you can then move to allocate more funds to certain aspects of your life over others.


This step should be quite familiar to you. Budgeting is the process of allocating funds to certain aspects of your life. For example, budgeting may cover aspects such as food, travel, investment, bills, etc. In the process of budgeting, you should, of course, bear in mind the priority of the areas in that you are creating budgets. Naturally, you would want to allocate more funds to the areas that you have identified to be more important and less to those that aren’t as important as the rest. Also, you should always try to stick within your budget to avoid having to compromise other areas or aspects of your life.

Low-Risk Investments

Investing is recommended regardless of your income bracket. It’s one of the fundamental things you can do to improve your financial condition. There are plenty of investments to choose from, and they all differ in one way or the other. Generally speaking, investments can be either low or high-risk. The greater the risk, the greater the reward often is. If you happen to belong to the average income earner bracket, then it might be wise to stick with low-risk investments. These types of investments ensure that you can recover the principal in case you may need the funds. At the same time, the gains you’ll receive will be slow yet steady and constant.