Knowing the importance of managing your money is a highly valuable skill. Being strategic and aware of how the money you spend is being spent and how the way you spend your money can be improved is super critical for anyone who is wanting to live a less stressful life.

It is super important to have money in your savings account so that you are prepared for any emergencies or unplanned bills that pop up. It is important to have money in your savings account to make it easier for you to accomplish your long-term goals such as; buying a house or being able to eventually retire.

The Importance Of Managing Your Money

When it comes to saving money, Brad Gunn from Vault Accountant says that some of the biggest mistakes Australians make include; Not saving, and spending more than they earn, usually purchasing products online and taking advantage of bulk buy discounts as they think they are getting a bargain when in fact they most likely don’t need the product or service,” says Brad Gunn from Vault Accountants.

Knowing what you spend is the first step in knowing what you are capable of saving. It’s often a bit of a shock when you sit down and work out what you spend each month on “non-essentials” or trivial items. If you haven’t already done this, check your bank statement and credit card plus track your cash spending for a little while. After you have done this, write your weekly and monthly expenses into two lists: the essentials and the non-essentials.

Take a close look at the non-essential list. Ask yourself if you are able to trim some items from this list, things you don’t really need to buy? Even if you don’t eliminate a lot of items, you can usually cut down the amount you spend on those same items.

“Some of the worst spending habits Australians have include purchasing alcohol, cigarettes and clothing. All discretionary items, you must make a subconscious decision to purchase the products, usually out of habit stop drinking or cut back. Stop smoking its bad for your health, and limit the amount of clothing you purchase, remember you can only wear one pair of shoes at a time. Most people neglect their health over discretionary purchases, most people will purchase beer before they pay the rent,” says Brad Gunn.

Mr. Gunn says that some important budgeting advice for Australians is to “Firstly, I have always said pay yourself first, what I mean by this is, when you get paid weekly fortnight , monthly pay yourself at least 10 percent of your net salary and put that in a special interest-bearing account, then pay your bills, allow for discretionary spending, and any surplus always pay off your home loan, credit card,” says Brad Gunn.

Mr. Gunn believes that that there is a serious gap between the level of education that Australians have in regards to their knowledge of money and how it should be spent and saved.

“Most people were never taught how to manage their money, you learn this from an early age, it isn’t taught in school, most people live pay to pay,” says Brad Gunn.

The Importance Of Managing Your Money

For young Australians wanting to improve their relationship with money Mr. Gunn says that it is important to avoid impulsive buying. “Regardless of what you earn, it is more about what you do with the money you earn. Always save at least 10 percent of every pay, if you have a credit card, make sure you only have small credit limit say $750 and if you use it all in one month, then you pay it off the next month. Avoid Afterpay traps they only encourage you to spend, and in most cases, people purchase items they really don’t need, and then end up throwing them away 3 months later. Impulse buying can be a big trap,” says Brad Gunn.

“Managing money isn’t rocket science, its common sense, change your habits, develop good sound principles and think twice before you buy anything, ask yourself the question, do I need it or do I want it?” says Brad Gunn.