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How to Have More Money and Keep it - Part 1

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by VTN (subscribe)
Published April 7th 2012
Martin Kingsley (Wikimedia Commons)

1. Value money.

Some may believe that money is evil. It is the reason for many arguments between couples and friends. My belief is money is a good thing. There are those who say they do not want a lot of money, it brings more problems. Yet, they go out and buy lotto tickets hoping to win the jackpot.

By having money, you will be in a position to help yourself and others around you. To be rich, I believe one must value money, give it high importance, use it well, donate it and enjoy it.

2. Track your spending and create a budget.

The majority of us do not know where every single cent goes. Why not write down all your expenses for a month or two? Do you spend money on an occasional coffee? How about the gym membership you hardly use? Do you overspend on your phone bill and exceed your cap?

After tracking your spending, you should create a budget. The Australian government has a website to help you get your finances in order. The website is and there is a budget planner template where you can fill out your income and expenditures. It will take about 20 minutes but is definitely worth your time.

Once you have done this, you will see whether you are spending less or more than you earn. If it is the latter, where can you cut back?

3. Spend less than you earn.

This is simple in theory but if you do this, you will be on the right track for a good financial future. This in my opinion, is one of the most important money rules you need to learn and apply. If you do this, the money can be saved, used to clear debts, or invested.

4. Clear your bad debts.

By bad debts, I mean debts that are not used for investments. They include things like credit card debts to fund your lifestyle, debts to buy a new car or fund your holiday. These debts will most likely attract very high interest rates (some up to 20%).

There are two strategies to clear these. The first is to start paying off the debt with the highest interest rate. This will benefit you in the long term, rather than paying off the lower rate debts. The second strategy is to pay off the smallest debt first. This will give you confidence and momentum to tackle the next debt. Whichever strategy you use, make sure your repayments on the first debt, when it is cleared, is used to pay the second debt, and so on.

Once the credit card debts are cleared, do not use the credit cards unless you can pay it off in full each month.

5. Have an emergency fund.

Everyone will be different, but if possible, you should save $1000 or more (or up to 3 months expenditure if possible) for those unexpected events, such as the car breaking down or loss of employment. This will provide a buffer to get you through the tough times, and prevent you from using those credit cards to accumulate more bad debt.

If possible, have your bank deduct $20 each week (or more if you think you can afford it) automatically into an online savings account, as soon as your pay comes in. Do not touch this money unless it is for an emergency.

Stay tuned for Part 2.

Cimexus (Wikimedia Commons)
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