9 steps to improving your money habits this financial year.

Statistically, most people abandon traditional New Year’s resolutions by the second week of February. If we apply that same timeline to the new financial year, we are due to go back to our spend-thrift ways by mid-August.

Currently, we are a couple of weeks into a new financial year and all those heady money promises are still holding fast. But what happens when we start to get sick of bringing our lunch to work, making instant coffee and limiting social events to once a fortnight?

What about when we’re finding it harder and harder to walk past our favourite clothing store on the way home from work… Where the new dresses and tops and shiny shoes are screaming, “Buy me, buy me, I’d look so good on you, you NEED me.”

Fashion items we’ve blown too much money on. Article continues after this video. 

You can stick to your new financial year resolutions. You can transform your ways. You can be one of those ‘good with money’ people.

All you need to do is work through these 9 simple steps:

Step one: Have fun budgeting.

Doing a budget doesn’t have to be a drag. It’s one of the best things you can do for yourself and your future. It’s like cleaning – not as fun as a night out, but boy does it feel good once it is done.


It’s about changing your attitude.

Managing your money well is the single most useful thing you can do for yourself and your future. If you manage your money well, you are less vulnerable to changes in your work status and unexpected expenses.

You have your budget sorted; you know how much you spend, where it is all going and when you will have enough money to enjoy purchasing something new without putting it on a credit card.

Step two: Respect every single cent.

When you are cleaning and you come across a very dirty fifty cent piece, you don’t throw it in the rubbish bin. That is money, something you have worked very hard to earn.

Imagine you found a fifty cent piece on your floor every day for an entire year. That would leave you with $182.50.

Would you throw $182.50 in the bin? Of course not.

No amount of money is too small to to salvage from the floor, from the bottom of your handbag or from under the floor mat in your car.

Once you start to respect money, every single cent, you are celebrating money. Same goes for negotiating small savings for bills and other expenses. It all adds up.

amy schumer netflix special
Eating at home more often doesn't have to be a bummer. Image: Amy Schumer

Step three: Be realistic.

Sure, you may want to retire at 55 and spend the rest of your life travelling. However, after doing the sums, you realise you'd be lucky to take one holiday to QLD each year following your retirement.

Instead of letting that realisation deflate you, do what you can to improve your position starting now.

Your budget isn't just about short-term and medium-term goals, it's also about long-term goals.

Part of looking forward to each stage of your life involves not only physical and mental preparedness, it also means getting yourself into the financial position to not only do it, but enjoy it at the same time.


Step four: Set goals

Set those short-term, medium-term and long-term goals and make a plan to achieve them all. It's important to set goals that fall into each of these categories. When you reach those short-term goals, it's incredibly motivating and will keep you determined to continue pursuing the medium-term and long-term goals as well.

Setting goals reminds you that, with a budget and a plan, you can achieve whatever you set your mind to, not just with money but with everything in life. Do whatever it takes to motivate yourself.

Many wealthy entrepreneurs framed their first decent paycheck, or a statement showing they'd paid off a large sum of money. They aspired to it and then they celebrated it.

Celebrating your financial achievements is an important part of the process.

Step five: Budget in rewards.

Whenever I mention the word "budget" to friends, family and work colleagues they immediately lament the loss of something they feel they can't live with out. Well then, don't live without it. If you love your spray tans, budget them in. If you live for getting your hair done, budget for that too.

If you can't even think about starting the day without your favourite cafe breakfast, then you can still do it every single day. Just budget for it.

This means cutting back on some of the expenses that you can leave or take, in order to pay for the things you 'need'.

Remember, only spend money on those things you truly value and feel you can't live without. Save the rest. You don't have to spend money on stuff or activities just because your friends do.


If you can do without it, save the cash for something that makes you feel amazing.

Melissa McCarthy The Boss
Once you've made a money plan everything feels better. Image: The Boss, Universal Pictures

Step six: Never be ashamed to save.

Be proud of your new money management skills. Never be ashamed to admit you are being careful with your spending and your saving.

Say it with pride. "I can't go out tonight because I've almost hit my first savings goal but have fun. See you next week!"


Then screenshot that goal and share it with someone you love. Well done. Good on you. Wasn't it worth it?

Was it really a sacrifice to stay home every second time your friends invite you out, to get ahead on your financial goals? It can be so fun to have a night in and, once again, it's all about embracing it.

Throw on your nightclothes, put on Netflix, make some comfort food and snuggle down and relax. Ask your friends to join you instead of going out. They can bring their nightclothes and comfort food to share.

Step seven: Reducing debt is empowering.

The only control we truly have over our lives, our happiness and our future is our level of debt. We seem to have an attitude in this country that debt is okay. It's not.

Sure, there is "good debt" and "bad debt" but there's also "debt that is a means to an end" and "silly, irresponsible debt". It's the latter you need to try and curb.

I have a friend I really admire who is the happiest, most fun person I know. She bought a house years ago and hasn't spent once cent doing major renovations, preferring instead to pay of the mortgage and investing in renovations then. If she was to renovate now she'd be paying interest on those improvements because of the debt she would still be carrying. What's the point of that?

You don't need a fancy new kitchen or two extra bedrooms when you have a massive mortgage. What you need to do is get that mortgage paid. The priority in home ownership, even in the purchasing of an affordable investment property, is true security.


Step eight: Never stop learning.

Never be ashamed of managing your money carefully. Image: Joy, 20th Century Fox

If you know someone who is seems to be good with money, ask them how they do it.

Why are we so ashamed and embarrassed to discuss money? We discuss everything else – diets, illness, cosmetic surgery – why not money?

Money affects every single aspect of our lives including diets and illness and cosmetic surgery. It's time to have important conversations about it and to learn and keep on learning.


Once you have talked to family and friends you know to be good with money, access some of the amazing financial advice that is out there waiting for you. You can find what you need in Podcasts, books, websites, etc. Then call your financial institution and your superannuation company and ask them for tips and tricks and strategies for maximising your savings and reducing your debt.

Continue to keep on learning. There are always things that can be improved.

Step nine: Don't blow your entire tax return.

Tax returns aren't found money. They result from your income and should be treated at income. So many people I know plan to use their tax returns to splurge.

If they have properly budgeted their regular income, including savings, they don't have to 'splurge'. They already have lots of items and activities to look forward to, budgeted in with their regular earnings.

Most tax returns are in the thousands and there is so much you can do with that money.

Have fun with some of it, but don't spend all of it on something that doesn't contribute to your financial goals. It's good to decide beforehand how you plan to spend it.

You may put 50% into savings, 25% into superannuation and then spend 25% on something fun like a weekend away or new clothes.

Be smart about how you spend it because you are smart. You also work hard, and the better you are at managing your money the less you'll have to work for it in the future.