Just out of university and making some real money for the first time in your life?  Everyone at work is talking about mortgages and investments. What is all this stuff?

This is how I felt when I first started working. Completely overwhelmed by the idea of being financially responsible. In the 8 years since, I’ve figured a few things out and have set myself up with a solid financial base. Enough so I can now afford to take a risk and work on my own tech start-up Pocketbook salary free.

At the same time, I completely understand the temptation of the first paycheck. When it hits, it’s pretty hard not to spend it all on beer and fun. But before you do, I implore you to listen to some of my tips to make sure you’ll on your way to your financial freedom.

Make your saving a disciplined process 

Recent studies have found that one in five Aussies struggle to find $1,000 in an emergency (News – Aussies Have No Emergency Funds). So saving for a rainy day isn’t easy.

The best way to do this is literally set your money aside. Start a savings account with another bank that offers high interest, and set up a regular direct debit to draw money away – “hide it and forget it”. Before you know it, there’ll be a pool of money for emergency situations or a down-payment for a place of your own.

I personally started with an ING account, and ultimately purchased an investment property as a disciplined way to save – mortgage payment equals deposit – as long as the property holds value.

There’s no such thing as a quick buck 

It’s true, there’s no such thing as a quick buck. I remember working on many a lottery syndicate or blackjack schemes while in university. None of these amounted to very much. The reality is that even if you’ve got a great business idea, it’s going to be a five to ten year slog to really make it – even if you’re the one-in-a-million Zuckerberg type.

So work hard, build skills and relationships to be more employable; meanwhile saving and investing wisely to build a good base. My personal philosophy is to focus on low-risk things first (ie cash savings and property) and high-risk things later (branching out to your own business).

Don’t overextend beyond your means 

Next is not letting your “wants” overwhelm you. It’s so easy to flaunt it when suddenly you jump from a student-level poverty to being able to buy brand name clothing, big televisions and flash cars. Many get into situations where they accumulate way too much debt.

In fact, another recent study by CBA says that Australians owe their friends 1.8 billion in total across our country (News – What Friends Owe ) – this doesn’t include credit cards! Two in five don’t even get any of that money back.

So the lesson here is really understand the difference between your “wants” and your “needs”. Spend wisely and spend in moderation on non-essentials.

Pay off debts early and often 

Another rule of thumb is keeping your debt balance as small as possible. Whenever you can, pay credit cards off first and don’t ever get a personal loan just to “make ends meet”.

There are so many young people that pay off one credit card with another and get into this continuous cycle of high interest debt. If you think you’ll be one of those people, try to avoid credit cards altogether. There are plenty of debit cards on the market today to cater for your online shopping needs.

My tip would be to get statements in the email, make a special folder for them and put some reminders into your phone’s diary for the due dates.. This way you will limit the chance of being charged interest and overdue fees.

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Finally, the best way to building for your future is to understand your past. Understanding what you spend week-to-week and month-to-month means that you can get smarter with cutting back and be creative about how you build that all important pool of money.

There are plenty of online tools available to help you do this too – some require really little work. Pocketbook (the tool I’m building) is one such example. So there’s no excuse.

About Bosco Tan

Bosco Tan is a Co-Founder of Pocketbook, a new Australian company seeking to make personal finance, budgeting and managing money ridiculously simple. He has years of experience working with big corporates to achieve their strategic and budgeting goals. He is now hoping to use these same principles to help individuals. Bosco is also a keen property and angel investor. You can connect with him at

photo credit: stuartpilbrow via photopin cc


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