It’s tempting to fixate on the dollar amount of your paycheck. But the fact is: What matters far more is what you do with those dollars — and what you allow those dollars to do for you over time. True financial freedom doesn’t happen until you’ve put your money to work for you.

It’s not just about increasing your salary but about applying some of that salary to building your net worth. By definition, net worth equals your assets minus your liabilities. Simply put: It is what you own minus what you owe. (I believe Benjamin Franklin described it best when he said, “Your net worth to the world is usually determined by what remains after your bad habits are subtracted from your good ones.”)

According to Bankrate.com, approximately 75 percent of Americans are living paycheck to paycheck with little to no emergency fund. Not only are they walking a fine line between financial ruin and survival, they are also creating a self-fulfilling prophecy that will have them working until their very last breath.

It doesn’t have to be this way.

Rather than bore you with mathematical formulas or fancy financial lingo, let me just say this: if you do your part your money will work harder — for you — than you ever imagined. It’s as simple as putting down your credit card and saying “no” to the temptation of an extra shopping trip to Target, one too many nights out with friends, or a shoe binge at Nordstrom’s. (I confess, I too like Jimmy Choo!) Even with as little as $3.50 per day, $25 per week or $100 per month in your budget, you can create wealth.

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Let’s assume that, starting at the age of 25, you took that $100 per month and opened an IRA account that allowed for retirement savings with tax-deferred growth. Let’s also say you invested that IRA in an S&P Index Fund and consistently did this — month after month, year after year — until retiring at the age of 65. That mere $100 a month over 40 years would total $48,000. Not too shabby. However, thanks to the concept of compounding, the actual balance in your IRA account would amount to nearly $260,000! (That's based on a compound annual growth rate of 7 percent, and adjusted for inflation.) Beautiful, eh?

Sure, you worked hard for that $48,000 but not nearly as hard as that same $48,000 worked for you — it generated almost four and half times more money. Now imagine the impact of cutting out two, three or four bad habits per month — perhaps even saving enough to invest the maximum allowed in an IRA each year ($15 per day, $458 per month or $5,500 annually, if you’re 49 years old or younger). Using the same annual return rate and inflation rate, your new balance in that same IRA account could amount to as much as $1,175,000. Yet, the total dollar amount that you actually worked for was only $220,000. Pretty cool stuff!