Creating Good Money Habits

Many Australians delay taking control of their finances because they don’t have the time, they find it too daunting or they may just not know where to start. The reality is the sooner you take charge, the sooner your can start working towards achieving better results, especially in the long term.

To assist you in this process, CPA Australia has developed 30 Ways to Build Your Wealth - a series of five fact sheets to get you on the path to good money management. The first fact sheet  provides helpful tips on creating good money habits.

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Summary

1. Save first, Spend later

Saving is easier if you commit to putting the money aside at the start of your pay period and spending what is left, rather than trying to limit your spending and saving the amount left over.

2. Ensure enough risk in a portfolio

Too little investment risk can be just as dangerous as too much investment risk.

3. Set goals

If you don’t set yourself personal financial goals, then how do you know what you are trying to achieve financially?

4. Set budgets

Budgeting is an essential tool to help you manage your personal finances and, most importantly, your cash flow.

5. Save part of pay increases and one-off payments

Next time you receive a pay increase or a one-off payment, why not save half of it - you haven’t had this money to meet expenses in the past, so hopefully you won’t miss it.

6. Consolidate accounts

Consolidating multiple accounts can reduce the fees and charges you incur and help you reach your goals sooner.

7. Teaching children to save

Set a good example for your kids now and they will reap the benefits in the future.