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This week on Money and Investing, Mitch Olarenshaw and I discuss a practical four-week action plan to get control of your finances, breaking down big financial goals into bite-sized, executable steps.
1. Get Clear on What You Want
Before anything else, ask yourself three questions: What do you want financially? Why do you want it? And if it matters so much, why don’t you have it yet? Without a clear answer, no financial plan will stick. Most people haven’t achieved their goals simply because those goals aren’t truly important enough to them, or they don’t know where to start.
2. Week 1 — Build Awareness
Know your numbers. Go through your bank statements and track every dollar coming in and going out. You’d be surprised how many forgotten subscriptions and leaking expenses are quietly draining your account. Businesses fail largely because they don’t know their cash flow, and personal finances work the same way. Also look at increasing income through a side hustle; there’s never been a better time to create one.
3. Week 2 — Build a Budget
Once you know your numbers, create a budget where money in exceeds money out. Prioritise non-negotiables like rent, utilities, and food, then cut the fat on discretionary spending. Small changes like switching supermarkets can save hundreds per week. The goal is to generate surplus cash flow. No surplus, no progress.
4. Week 3 — Set Up Your Emergency Fund
Direct your surplus toward an emergency fund first. This should cover at least one month of essential bills, with the goal of building it out to three months. This gives you breathing space if something unexpected happens and, just as importantly, builds the saving habit that will eventually become your investment account.
5. Week 4 — Start Investing
Cash is not a real asset; inflation quietly erodes its purchasing power. Once your emergency fund is in place, get invested. A simple exchange-traded fund (ETF) tracking the broader market is a solid starting point. Micro-investment apps like Raiz or Spaceship are great tools to get your foot in the door. Also consider making additional super contributions if you’re in a higher tax bracket. The key is compounding; the sooner you start, the longer your money works for you.
For more Info about Money and Investing, you can go to the podcast; The Wealth Playbook: Your Ultimate Guide to Financial Security; and The Wealth Playbook by Andrew Baxter – Audiobook, which is on Audible.
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Disclaimer: Wealth Magnet Pty Ltd (ABN 52 618 868 830) trading as Australian Investment Education is a Corporate Authorised Representative (CAR no. 1255231) of Grange Financial Services Pty Ltd (AFSL No. 488609).
