Welcome To Australian Finance Advice
If someone gave you a thousand bucks right now what would do with it? iPod? PSP? Maybe some funky new clothes? Yeah, that'd be pretty cool, but what about in a year's time when the iPod's been dropped by your sister, Play Stations are so not hot right now, and bright purple is no longer the new black? How about this? Say you put the $1000 in a term deposit for a year at 10%.
Then you'd have $1100 already, and with compound interest (interest on the interest) you'd have even more! OK, that doesn't sound like that much, especially if someone's just handed you the thousand bucks, but what about if you've saved that amount little by little until you've reached a sum of money you can begin to do really good stuff with? You might want to invest it further - start a share portfolio, or some other long term investments - or you might want to save up for an overseas trip when you leave school. No matter what you want to do, the point is to start thinking smart about your money, and plan for the future. The earlier you start to think smart about your finances, the easier it is to build a good savings attitude - and as you know, 'tude is everything. Whilst thinking about a savings plan it is always advised to invest in good quality income protection cover in case you ever need cover due to sickness or unexpected accident.
 Budget
It's a boring "B" word (unlike, say, bikini), but your budget could be the beginning of a beautiful relationship with money. It's a really simple thing to do, and it can save you a lot of time and effort further down the track, but lots of people just don't bother to make a budget. Why? I don't really know, maybe they think it's harder than it is, or maybe they think they're just too cool for it. But you know what? Once you've got your budget in order, you'll be able to do much cooler things than they'll ever be able to do. OK, here's all there is to a budget, seriously:
That's it! You thought I was going to go into some big drawn-out description of amortorisation schedules and riparian rights, but no. (You probably don't need to know too much about the timetable for payment of a mortgage, or the rights that go along with land bordering a body of water.) OK, I lie, it's not quite that simple, there is one more thing:
- (Money in) - (money out) = savings.
And that's where the fun starts. Yeah baby, yeah!
 Savings
Once you've worked your budget you can start to think about
how you can make the savings grow. Writing down your budget on paper
allows you to see where you can cut back on the money out, or if you
need to find a way of getting more money in, (and no, selling your
brother is not a good idea, no matter how annoying he is). You might
want to get a part time job, or offer to do odd jobs around the house
that your parents will pay you for. Part-time work is not only a source
of income, it's also a great way to gain some skills and confidence.
You'll get to meet new people, and get some contacts who might be able
to help you out later when you're looking for full-time work. And when
there's more money coming in, that might mean you can send a bit more
money out, while still being able to save. A pretty good standard to
start with is to try and save at least 10% of your income. You might be
able to save more than that, but ten per cent should put you on the
right track. Think smart, and have fun with it, 'cause the habits you
get into now, are more than likely the habits you'll keep.
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