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Chapters: Part I: Six Practical and Important Money Principles Part 2: Six Danger Zones where your Compass heads South Part 3: Six Smart Lifestyle Money Habits to cultivate early

Introduction: Ideally I would have envisaged gaining good Money Management skills, after graduating from four years of Accounting and Finance studies at Uni, and subsequent work in the Accounting field thereafter. But recently becoming Married as well as a recent Home Owner, has really emphasized the significant need for personal Smart Money sense - which I believe is very critical for everyone - notably Grads and Young Adults. I trust this short booklet can be a good launching pad as you step out into a lifetime of financial decisions.

Healthy Financial Regards – Peter Nicholls

Melbourne High + Monash Uni Grad

Part 1:

Six Practical and Important Money Principles

i) Money use is reflected in Values and Priorities and Lifestyle Choices

It is very clear, various priorities and values govern the use and handling of money. One mate will “invest” $85k into a new Holden HSV while another will go on endless overseas trips. The flow of money in our lives will be directed towards our “inclinations” or those things we deem as valuable. For some, investing in relationships – (family or otherwise hold much stead). While for others, getting established in life is critical. Which ever way you look at though, money is fundamentally essential for living in Australia.

ii) Good Money Management Boils down to Basic Accounting

As an authentic accounting Principle – YOU MUST HAVE MORE INCOME (incoming cash) than OUTGOING EXPENSES in order to stay afloat and not go backwards (ie Go into Debt). From the outset, as a Grad you must learn very quickly, the different ways of earning INCOME that there are in the world. For many Full-time employment is a predicable way of doing this, but for more others the business road is more fulfilling and rewarding. It is worth, taking time to study indepth how Money can be cultivated and the paths to wealth that can be taken.



Gratitude and Thankfulness (CGT) are Powerful Mindsets to cultivate

As a winning combination, CGT are excellent Mindsets to nurture when handling resources. In regards to being Content: If you are Satisfied with your EXISTING possessions, the Pull of marketers trying to “sell” their latest gimmick won’t be as strong. Most of Western advertising is geared around impressionable people feeling “unhappy” about their station in life. CGT will provide a good foundation for frugal “happy” living.

vi) Learning and

implementing Budgeting early in life

is critical

I know for some Budgeting sounds “ uncool� but trust me: Budgeting

is one of the most valuable life skills you can ever learn. Whether some of your Budget (Management) happens on a Phone app, or in an Excel spreadsheet, I believe everyone should have a fairly good idea of what they are spending Annually and take stock monthly. Planning for up-and-coming outlays is critical.

Move ongoing expenses into Asset Form v)

A critical wealth building principle to learn is making money flow towards Asset Building, rather than just regular expenditure. As a simple example of this happening: was when my wife and I moved from Renting to Home Ownership, (with the help of a Bank loan). What was essentially a monthly EXPENSE of Rent, now gets “invested” towards building an Asset class of Property. Any expenditure on “Learning” can possibly be considered Asset building too with increased industry knowledge.

vi) Don’t be afraid to ask for help

As a 40 something – home owner with x20 years in the workforce, I continue to be surprised how little – younger folk don’t seem that interested to use inquisitive and investigation skills to enlarge their understanding on topics. Maybe it might be that Google has eradicated the need to ask questions these days, but generally I’ve only had ONE younger guy of the 30 I’ve related to: seek out direct help for the Real Estate decisions he’s been making. Finance matters are quite complicated sometimes and extra counsel can always be helpful.

Part 2: Six Danger Zones to

tread carefully Financially

i) Expensive

spending to Boost

“Self Image or Ego�

is Dangerous

A Dangerous personal mode of spending can start to develop when splashing out on purchases for EGO (or Confidence) purposes. It starts as simple as “Branded clothing and accessories: the Ray bans, the Rip Curls, the Nike Air Max. All for the sake of “Feeling Good” about oneself. But before long it graduates in BMW’s, Porsches and fancy 2MIL homes. Striving to establish a personal identity, without necessarily becoming a “Brand Boy or Girl” is a more authentic and a cheaper smarter option

ii) Empowering

Toxic habits can deplete Financial resources very quickly

For many these days, spending on addictions quickly diminishes available monies. Weekend alcohol binges, gambling and smoking habits, even sugar and fast food obsessions. Without any restraint in such uncoupled spending, money can fast evaporate and take a southward direction. It is most important to realize the danger in such habits and practice extreme prudence.

iii) Joining together either in Marriage or Defacto with

a “Poor Fiscal�

Manager is Dangerous

The “Financial acumen” of your Marriage or “Dating” partner, can dramatically affect your financial state. Getting into Bed (literally) with an excessive spender or poor Financial manager will put massive stress on your own financial state. Counselling for couples when relating on financial matters is highly advisable. This could also be said too for Business Partners you may join up with.

iv) Failure to

educate yourself – will bring damage and harm

Ignorance in areas of Financial Management will undoubtedly result in grievious harm financially. Visiting a Financial advisor or counsellor can be helpful in effective Financial navigation.

v) Failure to take

Mental Health “Self-care� will have financial consequences

Your Mental state is very very critical in money management. Impaired thinking leads to impaired judgements about the use and handling of money. This is something to be very mindful of.

vi) Money can end

up being a BAD Master to Worship

It’s been acknowledged already, money is fairly fundamental for life these days. But some people take on a Greedy perspective, where their particular Station in life or Money level is never enough. Sometimes Morals and ethics go out the door in these cases and sometimes Relationships are thrown under the bus to achieve end goals of more and more money. Without sounding too pious or religious: the Worship or adoration of money (at a heart level) does effectively tend to corrupt people.

Part 3: Six Smart Lifestyle Money Habits to cultivate early

i) Sourcing FREE


cheap “Resources”

is Smart

Self education doesn’t have to be expensive. To be fair, paying 20-30 grand on a degree does has some merit as a entry criteria for a chosen profession. But reading in every other area can normally sourced from 2nd hand outlets. Even by scouring Google or Youtube one can find oodles of info-resources for free.

ii) By

becoming a Smart Shopper – puts more Money back into your Wallet

Cultivating a mindset of the frugal shopper is very smart indeed. This can mean using Gumtree for cheaper alternatives. Buy groceries or clothes from Factory outlets or the

Salvos will save you. Also

using Entertainment Book vouchers when dining provides savings.

iii) Smart Shoppers

definitely AVOID

“FULL Price”

Brand new Car Purchases

Owing to the fact that cars by and large depreciate dramatically once they leave the showroom floor. It is generally a far smarter idea to buy a quality 2nd hand vehicle with a LOWER purchase price but also economical on running costs.

iv) Wise “Preventative

Spending” means less

expensive outlays.

This includes buying

“quality products”

that will last longer

Adhering to routine checks for cars, teeth and health check-ups can all pay dividends to avoid expensive “surprise” outcomes. For household purchases (ie. whitegoods / tech goods), investing in “Quality” Brands with the better reputation for durability mean longer use time.

v) Investing in YOUR


(Circle of contacts) pays good dividends

Goodwill is a very tangible commodity these days. If your network is neglected – ie calls / cards / presents / dinners etc then Goodwill probably will die off. The upside of a healthy Network is potentially leveraging more requests (when needed).

vi) Your Money Universe

doesn’t just revolve around

You. In other

words, generosity

is the becoming of


The responsibility of sharing with those in need is critical for developing a generous mentality. Some folk can be quite stingy with their money and humanity suffers as a result. As the old adage goes: to whom much is given, much is required.

Profile for Peter Nicholls

Money Smarts for Young Adults  

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18 Powerful Principles to help Youth relate to Money Part I: Six Practical and Imperative Money Principles Part 2: Six Danger Zones wher...