My Mother was my best financial teacher, who educated me with some simple ground rules when I was in my teens. These are the principles that have always delivered good results.
1. Don’t spend more than you earn! (including credit cards)
2. Save 10% of your income and put this into a separate account for emergencies and long term goals.
3. Don’t borrow money for depreciating assets. This includes cars, boats, etc. Wait until you’ve saved up the cash. 4. Focus on ‘need’ spending, not ‘want’ spending. Basics before bonuses—food before alcohol or luxuries.
5. If possible, put some money into long term investments for big expenses in later life, such as education. Even a few dollars in ‘blue chip’ shares will pay off in the long term. This is how I got my deposit for my first house.
6. Have a budget and keep track of your spending.
At times, when I’ve needed to save money, these principles have also helped:
1. Buy a reliable second hand car that suits your budget, rather than one that suits your ego. Own it as quickly as possible.
2. Buy good food in bulk when it’s on special, but don’t waste it. Use fresh produce to make your own meals.
3. If you need to save some money, buy one less coffee or one less beer. They add up.
4. Home made gifts are often the most cherished and least expensive.
5. Catch a bus or a train instead of driving a car. If you drive, don’t park in the city. I generally park at Spring Hill and get some exercise walking into town.
6. Spending time with your kids is the best investment you can make. Activities you enjoy with them, don’t have to be expensive eg. Going to the park, having a picnic at the beach, visiting family & friends, exploring new walks/areas, or going for a family bike ride.
7. Having a good financial advisor that looks after your interests not theirs.