Taking the time to manage your money can really pay off. It can help you stay on top of your bills and save $1000s each year.
Managing finances can be tricky for young adults. The good news is you can educate yourself about responsibly managing your finances and avoid potential mistakes from which it could take years to recover. Learning how to manage your finances early on is an important part of financial education for students and will guide you on a path to a healthy financial future.
SET FINANCIAL GOALS
Setting financial goals is a smart choice and can be very rewarding. Instead of wandering aimlessly, you have something to strive for and a clear path for getting there. To set financial goals; first define what your goals are. Write them down and set milestones along the way to help you achieve them. Prioritize your goals and put together a plan of action. Just remember to be realistic when setting financial goals. You want to set a goal that is reasonably attainable.
BUDGETING
Creating a realistic budget and sticking to it is a great way to help you save for the things you really want. A budget lets you know if you're living within your means. A budget basically keeps track of:
- The money you regularly earn (from wages, salary, interest from bank accounts, etc.) - this is called your income
- The money you regularly spend (rent, food, bills, mobile phone, etc.) - this is called your expenses
What you're left with once you subtract your expenses from your income is your "disposable income" - the money you can afford to spend on things you like, or save.
Moneysmart provides financial tips for young people on topics including budgeting, investing in shares, superannuation, saving money, credit cards, dealing with money troubles and more. Click here for your budget planner
OPEN YOUR OWN BANK ACCOUNT
Once you start work or leave home, you’re on your way to earning money to buy the things you want. Many organisations pay their employees weekly for the hours they work on a weekly basis. Most employers don’t pay with cash and quite often their payroll systems are designed to deposit wages directly into your bank account.
To make sure you get paid correctly from the very first week, it can be helpful to establish a bank account in your own name before you leave school. You may need some help from your parents or guardians to do this and will also need some money to create a bank account opening balance. You will then be able to provide your bank account details to your employer. This information must be correct to make sure they pay your wages into the correct bank account.
If you don’t have a bank account this information from ANZ may help you get started.
Everyday account with Visa Debit card1
Get paid into your ANZ Access Advantage account. And, if you're 14 or over you could get the freedom of Visa Debit access1 to shop online, over the phone and overseas1.
ANZ Smart Choice Super is the easy and low cost super account you can see with your other accounts on ANZ goMoney3.
ANZ goMoney app to manage your everyday banking on-the-go and transfer money to friends with just their mobile number3.
ANZ Online Saver2 gives you 24/7 access to your money via your linked everyday account through ANZ goMoney3 app, ANZ Internet Banking and/or ANZ Phone Banking while you earn interest.
APPLY FOR A TAX FILE NUMBER
You’ll also need to have a Tax File Number. Employers are required to deduct tax from each employee’s earnings and to send that tax to the Australian Taxation Office (ATO). After 30th June each year, organisations then issue each employee with a Payment Summary that confirms:
- The employee’s earnings within the twelve month period from 1st July to 30th June (also known as a financial year); and
- The total amount of tax that has been withheld from their weekly wages and sent to the ATO during the same period.
Employees each then complete and submit a tax assessment and employees then receive either a tax return (if they’ve paid more tax than they’re required to), or in some cases the ATO asks employees to pay a tax debt (where they haven’t paid enough tax).
To ensure employees are taxed correctly, individuals should include their Tax File Number when they fill out an Employment Declaration Form upon commencing a new job. In cases where a new employee doesn’t provide their employer with a Tax File Number, the employer is required to deduct more tax, which means the employee takes home less pay!
You can apply for a Tax File Number by applying online at www.ato.gov.au
SUPERANNUATION
A little smart planning early can help make sure that you're rocking chair days are spent comfortable and financially stress-free. Your employer is required by law to pay a certain amount of your salary into a superannuation fund, a pool of money that you are able to access once you retire.
You can choose which superannuation fund the money is paid into so it's worth taking some time to check out the fund that suits you best. There's lots of jargon when it comes to superannuation so it's worth visiting the Australian Taxation's Office for a step-by-step explanation of what is involved.
PAYING FOR STUDY
Education doesn't come cheap, unfortunately. If you're planning to do some tertiary study, there are going to be some costs, including:
- Course fees (or "tuition fees"), which you will have to pay for any university, TAFE or other training course you enrol in
- The cost of textbooks or other course materials (course fees usually don't cover these costs)
- A general service or amenities fee, which is used to fund student services and activities (note that not all courses require this fee)
The good news is that the Government has made paying for your studies a bit easier. For more information on assistance with paying for your education, visit Paying for study.
DECISION MAKING
Get in the habit of making smart money choices early and you’ll develop a pattern of behaviour that will stand you in good stead the rest of your life.
Make smart choices. You can do anything you want, but you can’t do everything you want. Decide what’s important to you, and pursue that. And remember to leave time for yourself.
When you want to buy something, ask yourself “Do I need it?” If you think you do, then wait. Don’t buy on impulse. Write the object of your desire on a piece of paper and pin it to the wall. Look at it every day for a week. If, at the end of the week, you still think you need it, then consider purchasing it.
PLANNING FOR THE FUTURE
Consider the following:
- Where do you want to be in five years?
- What do you want to be doing?
- Where do you want to live?
- What kind of experiences do you want to have?
Taking each day as it comes is a good philosophy for life in general but you need to get smart if you want to achieve your goals. That's where good planning comes in.
In today's world of credit cards and quick loans it can be tempting to fast-track your desires but bear in mind that this is also a fast-track to debt. And if you don’t plan before hand you debts can quickly get out of hand. To help you get your money on track, check out www.moneysmart.gov.au
“Expect the best. Prepare for the worst. Capitalise on what comes.” Zig Ziglar