Whether you want to be super rich or just enjoy a good, humble life, the difference between happiness and struggle street is a matter of mastering your finances. I used to think that if I just earned a bit more then I would be fine, but the reality for me (and for many of us), was that my costs just went up with my income.

I was certainly enjoying myself and I had nice things, but I wasn’t getting ahead, and retirement at 60 seemed forever away. It was time to make some changes and these are some of the money rules I live by.

1. Spend less than you earn or, even better, desire less: It sounds straightforward but, with the availability of easy credit, it’s amazing how many people are living beyond their means.

Most of the time the spending is mindless and impulsive. We don’t need the thing we bought, but it was nice and we wanted to feel better so we bought it. Linking your spending to your values is a great place to start. Making sure that your spending is aligned with what is truly important to you, rather than what you think you should be doing.

In the words of Will Rogers, “Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.”

Another useful tool to curb spending is to think about your purchases in terms of time. How much time do I have to spend working to buy this thing? The gorgeous handbag might be lovely, but you may well decide that it isn’t worth a day’s pay to own it only to discard it next season. Align this to your values and you have double the incentive to reconsider your purchase… if you have to work for a day for the handbag and it means you are another day further away from your dream holiday, or financial freedom then you have a solid reason to put it back on the shelf.

You could try the 50:30:20 rule: Spend 50% of your income on fixed costs that you need. 30% on discretionary spending and save and invest 20%. I would, however, put it in a different order: Pay yourself first so set aside the first 20% before you do anything else. Then pay your fixed costs, then the discretionary spending.

Maybe (gasp) you could try having a budget. I’ve written about that before and I’m not going to bang on about it here. Suffice to say, you can’t get ahead if you have no idea where your money is going, can you?

2. Own less. The less you own the less you have to maintain, store, clean, arrange… Managing all our stuff takes time, effort and often more money. How many of you have been guilty of buying things to store your things in? Shelving, storage containers, lovely boxes. The solution may be to just buy fewer things.

“When we haphazardly spend money on foolish things, we have less remaining for more important pursuits.” Joshua Becker.

Minimalism is all the rage at the moment and there is no shortage of inspiration: Watch the Minimalists doco on Netflix, follow Joshua Becker or Marie Kondo. Whatever it takes…

I’m not for a minute suggesting you should live like a monk. Just really consider whether all the stuff you are spending your money on is making you happy.

3. Shop around. If you do actually need to buy something, take the time to shop around. Do your research. Avoid fast fashion: it drains your bank account, depletes the planet’s resources and often exploits vulnerable people in developing countries.

Go for quality over quantity. It might cost a little more right now but you won’t be replacing it in a years time. It’s cheaper in the long term.

4. Have an emergency fund. Things go wrong so plan for it. People get sick, lose their jobs, the car blows up, the hot water system fails… These things happen and they are normal, so have some funds set aside to deal with them when they arise. A rule of thumb is to have three months worth of income in an emergency savings account. This lets you fix the car or buys you time to find a new job.

If you have a mortgage and it has a redraw facility, you might choose to have your emergency savings tucked in here. It has the dual benefit of giving you access to emergency money if needed, whilst also reducing the interest payable on your loan. (Double-check with your lender that there are no fees associated with redrawing against your loan).

5. Use debt wisely and never take on personal debt. Debt can be really useful, and even necessary at times. If you want to start a business, buy an investment property or a family home then you will need debt. Just make sure you give it due consideration because debt represents an opportunity cost. You need to be able to service that debt and the cost of servicing goes deeper than the repayments… what else could you be doing with your time and money?

Personal debt might be car loans, holidays, store credit, credit cards, or payday lending. They are usually for things that go down in value and the interest rate is generally astronomical. Avoid this at all costs and just save for what you want. If you do use a credit card, pay it off in full before the due date.

6.Take the time to educate yourself on basic financial literacy. One of the biggest mistakes we can make about money is to go in blind when making financial decisions or to put it in the too-hard basket. I’ve written about financial basics before so have a look at that as your starting place. Ask questions, read books, journals and blogs, then ask more questions.

Most of us weren’t taught basic financial literacy at school so it’s up to you to educate yourself. You may choose to go to an adviser but always make an effort to read the information they provide you and to understand what they are recommending.

7. Don’t take financial advice from people at parties, or the uber driver for that matter. Often by the time something is being talked about at parties, it’s time to move on… think bitcoin and other cryptocurrencies. If you do need advice, take it from a professional financial planner AND refer to rule 6 … educate yourself in the process.

If you do seek professional advice, make sure you are comfortable they understand you and your needs. Ask lots of questions.

As an adviser, I much prefer it if my clients ask questions before they proceed so I’m confident they have a working understanding of my advice.

8. Invest early. Start small if you have to but just start. Don’t wait until you have some set amount saved. The earlier you start the earlier you can take advantage of the magic of compound interest.

Compound interest is simply earning interest on interest year after year. For example, if you invested $5000 today and it earned 5% pa, you would have $5250. In the next year you then earn 5% on $5250 so your investment goes to $5,512.50. Over 10 years your investment is worth $8,144.47. If you are adding extra savings to the investment each month then this further adds to the magic of compound interest.

“Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t, pays it.” Albert Einstein.

9. Have a goal and a plan to get there. It’s always easier to implement a financial plan if you have a reason for doing it. Make the goal something that resonates with you and ensure you can track your progress towards the goal. You can also link small action steps to achieving your goal, for example:

Goal: I want an emergency buffer of $5,000.

Action step: I need to spend less on take away lunches and coffee and save $200 per month.

Outcome: in 2 years I will have my buffer.


  1. Spend less than you earn
  2. Own less
  3. Shop around
  4. Have an emergency fund
  5. Use debt wisely
  6. Educate yourself on financial literacy
  7. Don’t take advice from people not qualified to give it
  8. Invest early
  9. Have a goal and a plan to get there.

I hope you have found this useful. Take what works for you and implement it over time. Don’t feel overwhelmed, like you have to do it all. Just pick an action and do it today, then move on to the next action step.

It’s time to take control and make your money work for you.