Budgeting and personal finance are complex aspects of our lives which, when mastered, can provide incredible, lifelong benefits. Learning how to make money and save money are the two most basic foundations for financial freedom, and will teach you to find value for money without having to pinch pennies in your spending.
Once you’ve learned how to maximise the amount of money you earn, you can begin looking at how to save money and truly get the most from your wealth.
Money is one of the most important and essential components of our lives. Learning how to make more money, and save more money, in your life will provide immense improvements to your quality of life - you just need to know where to start.
If you’re ready to start earning more money, saving more money, and living a better life, then read on to begin your journey with Money.
Creating a basic budget will be your first step to making - and saving - more money in your life. Once you’ve performed a financial audit of your life and feel in control of your finances, you’ll be ready for an advanced budget planner with greater depth.
For now, we’ll use a beginner’s budget strategy: The 50-30-20 budget.
The 50-30-20 budget is a simple, easy-to-understand budgeting technique anyone can use, and involves four steps:
|Essentials (50%)||Non-essential (30%)||Savings (20%)|
|Rent Utility bills School fees Groceries Insurance||Dinner out Dates New clothes An extra coffee each morning Buying presents||Credit card debt Loan repayments Fines Growing an emergency fund|
Sooner is always better - this is true for both saving and repaying debt:
MONEY TIP: The most important thing in saving - like maintaining a healthy diet or going to the gym - is being able to maintain a consistent mindset that will allow you to track progress over time.
Remember: everything we do at this stage is to make money for one of two reasons:
Now we have a basic overview of our income and expenses, it’s time to look at some financial spring-cleaning.
This next step is to look at clearing out your home of unused objects. There are many benefits to committing to this as the second step of your journey:
Below is our ultimate list of household items to sell for money - if you’ve got any others, let us know!
|Type of item||Examples of items|
|Small objects||CDs Games, puzzles and board games DVDs Blu-Rays Tapes Books Cookbooks Vinyl records Retro toys Kids toys Spare vacuum cleaner|
|Kitchen and whiteware||The spare freezer Unused kitchen appliances Blenders Sandwich press Serving platters Milkshake makers Waffle makers Bar fridge|
|Large furniture||Old beds TV cabinets Dining tables and chairs Couches Pianos|
|Personal items||Watches Jewellery Artwork Perfume and aftershave|
|Electronics and devices||DSLR cameras Digital cameras Old iPods iPads Old mobile phones Gaming consoles Computer accessories and cables Old laptops|
|Antiques||Antique china Silverware Glassware Plates and saucers|
|Clothing||Unworn shoes Unworn clothes Rarely worn designer clothes Handbags Sunglasses Scarves Children’s clothes|
|Garage and shed||Tools Power tools Old tents Camping equipment and chairs Lanterns Old lawn mowers Whippersnipper Leaf blower Edger Old tarps Trestle tables Bicycles|
|Home office||Desks Chairs Old printers and electronics Bookshelves Filing units Storage units Fans IKEA furniture|
MONEY TIP: Maximise the money you make through selling items by charging delivery in local areas, or using social media to avoid listing and success fees.
Secondary and passive income Once you’ve cleared out your home and sold any unused items and furniture, it’s time to look at ways to maximise your earning potential. Outside of your primary career, look at ways to supplement your income through a side-business or passive-income opportunities:
Negotiate better deals Look at the consistencies in your spending, and where you may be able to negotiate a better deal:
Earn more money A pay rise is the fastest way to earn more money, whether you’re starting a job or negotiating your salary with an existing employer. Assessing your salary and value as an employee are two crucial steps in this process - you can learn more in our guide on negotiating your salary and how to get a pay rise.
Now that you’ve maximised the amount of money you can earn, and the amount of money you can save through your beginner budget, your next steps will be to build wealth into the future:
A budget plan is an accounting tool which lets you easily track your income and expenditure. A budget plan is a crucial part of an effective financial plan, and can be created to track short, medium, or long-term financial goals. You can use a budget plan to save money, pay off debt, or assess long-term goals such as purchasing a home.
An honest budget plan will be the best way to see how much money you have coming in and going out each week, fortnight, month or year - and help you take complete control of your finances.
Learn more about using a budget planner spreadsheet.
A high-interest savings account (HISA) is a type of savings account offered by banks, which is similar to a standard bank account, but is designed for saving instead of spending - these savings accounts will often also have bonus interest applied when certain savings conditions are met, and use compound interest calculated daily and paid monthly.
A term deposit is a low-risk investment strategy offered by major financial institutions - such as banks - which allow you to invest your money at a fixed interest rate for a predetermined period of time. As you are unable to access your funds without incurring harsh penalties, banks offer higher interest rates for term deposits than standard savings accounts.
Compound interest is the process of increasing an amount of money at set periods by applying interest to a new, calculated amount each time.
The easiest way to understand how compound interest works is to look at it as an amount of money plus interest that is calculated on a previous amount of money plus interest. It is a cycle of financial growth where increasing amounts with the same interest rate applied will still continue to yield greater additional earnings each time.
Your tax return is a constant in your working life, and learning how to maximise your tax refund early on in your working life will be a great advantage toward long-term savings goals.
Tax deductions are used to reduce the amount of tax you need to pay to the ATO each year, and can help maximise your tax refund amount. When completing your tax return, you can claim deductions for certain expenses related to your income. You can engage a registered tax agent to identify all deductions you may be eligible for.
Money.com.au want to make managing money easy and fun! By giving Australians simple tools so they can make the best decisions they can about their money.
We understand that the world of finance is complex, and offer free, extensive guides on Personal Loans, Car Loans and Business Loans, along with tools like our Budget Planning Spreadsheet to help you better manage and understand personal finance.