Is your child going to be driving soon?

The older you get the more inflexible you become, not willing, or able, to change our ways and habits. So for that reason alone we need to set good habits in place for the younger generation – good financial habits.

Not to say they will become the next governor of the treasury, or an actuary, or even accountant, but they will take good money habits into their lives and be able to manage their expenses. Imagine if you had that money training at school or from your parents, where you learned to save, save regularly not just every now and then; if you learned money sense. Saving for a house, or holiday or kids education would be really easy, second nature.

So we as parents have the opportunity to create this innate money comfort for our kids. We can train them to be comfortable with money, knowing that with the right mechanisms in place they won’t struggle through life and will be able to set and achieve goals.

We need to take this action now, whilst they are in high school, at 12, 13, 14, even later at 17 and 18 if you’ve left your run later. It is our job to teach them about money and how to manage it. One of the best ways to help a teenager learn about saving money is to give them an incentive to save it. One of the biggest items that a teenager craves is buying that first car. It’s more than wanting a sweet looking car, it’s about freedom. Parents go nuts thinking about the freedom it gives that teenager, and teenagers salivate over the thought of that freedom. You can use the purchase of a car as a learning tool by setting up a savings program for it.

At the age of 12, sit your teenager down and begin to explain to them that they may not be fantasising about owning a car right now, but they will most likely be thinking about it in a few years. Here are a few programs that may work with your teenager to help them save for their first car and teach a lesson about saving money and build quality personal finance habits.

1.       Sit down with your teenager, and put together a 3 to 4 year savings plan. First, set a goal of how much they want to save to buy a car with cash. NO FINANCING! Their first car doesn’t need to be a NEW car! List several activities that the teen can perform for extra money. These would include chores out of the ordinary. Clearly define which chores are done because they are a part of the family and which chores will receive compensation upon completion. Draw up a hypothetical situation where if they do 2 of these chores for the next 3 years, then they will have X amount of dollars saved towards their first car.

2.       Think about matching the amount that the teen saves to put towards a car. This adds the factor of incentive into the equation. Tell your teen that you will match their savings dollar for dollar, but only towards the purchase of a car. If they save $2,000, then they can buy a $4,000 car. If they save $10,000, then they will buy a $20,000 car. I would put a limit on this, because you never know, you may have a very entrepreneurial teen that ends up saving $20,000 over a 4 year period! You probably don’t want to be stuck shelling out 20 grand AND allowing them to drive around a $40,000 car. What this program does is gives the teen something to work for, and this is not something out of reality. Your teen will find creative ways to save, and they will be motivated to save knowing that they can have double the car if they save more than expected.

There are many other ways to help teach a teen the value of saving money. Make sure they are always putting aside a certain percentage of their saved money towards giving to others. It doesn’t have to be a lot, just something to get the message home. If you teach them the value of giving at a young age, they will grow up to be generous and kind citizens in the future. Greed kills marriages, friendships, and destroys careers.

A good start to understanding the money saving habit process is by downloading our Free Your Money Sense e-Book: “6-steps to Financial Security”.

Should you keep money under the mattress?

If you want to build or maintain a healthy financial life, then keeping your money in your mattress is probably not the best place to start. Budgeting however, should be your fundamental starting point. After all, how can you tell you’re on track if you don’t know where your hard-earned pay-cheque is going?

Some of us, correction: most of us, will find it daunting to maintain a budget. Getting all your expenses together, tracking what should be paid and when, how much you have left for entertainment, saving for long-term goals – it’s enough to make you give up before you start. But what if there was an easier way to manage your cash-flow that didn’t require hours of sifting through receipts or crunching numbers?

There is and it’s not that hard to get started. It starts with categorising your monthly spending into four buckets:

1. Fixed costs. These are bills that don’t fluctuate much and remain pretty constant each week or month, or whatever period they are relevant to: things like rent or mortgage, a phone bill or your car payment. It also includes essential costs that may vary slightly from month to month, like utility bills such as electricity or water. Although they may vary slightly, you can work out an average for the purpose of this budget. But generally speaking, if you can predict how much an expense will be, it belongs in this category.

1. Financial goals. These include any sort of savings or debt goal you’re trying to work towards every month, whether that’s paying off credit card balances, paying down your student loans, saving for a home or paying into an emergency fund regularly, or topping up your Super on a regular basis.

1. Non-monthly expenses. Got a bill that you have to pay at some point every year, but just not every month? This could include your home or car insurance or for that matter, most annual insurances, car registration fees, annual health payments, and even school tuition belongs in this category. Add up what those types of costs total to each year, then divide that total by 12. That should be what you’re setting aside each month to cover those expenses when they come up.

1. Flexible spending. This category covers all those everyday costs that fluctuate each month. This can include groceries, restaurants, shopping, movies, petrol and pretty much any expense that may vary month to month.

So now that you’ve categorized your costs, how much can you actually flexibly spend each month without blowing your budget? Well, that’s a relatively easy calculation. What is your monthly take-home pay? From that, subtract your total fixed costs, and your financial goal contributions, and those non-monthly expenses you calculated. The amount that’s left over is what’s available to cover your flexible spending – the daily coffees, new shoes, magazines, etc.

If you want to know what your flexible spending is per week just divide your monthly figure by 4.3, and you’ll have your weekly spending number to stick to. So if you work out the above, and stick to it, you won’t be in danger of spending more than you earn.

If you can put your hands on the numbers from your bills, it’s not that hard to work out. And if you can work to a budget each week or month, you’ll certainly be on your way to building a financially secure future. If you want some more great advice about securing your financial future, Here’s a great Free e-book from Your Money Sense: 6-steps to Financial Security

10 Things To Do To Change Your Life Forever

We are surrounded by change, and the more you resist, the tougher life gets. Accept change, look at it as an opportunity to try new things, to meet new people, to challenge you.

Change can come upon us by way of unexpected events or by choice. It’s inevitable so grab it with two hands and see where it takes you.

1  Be Happy

What makes you happy? Really, happy. Is it a person, is it an activity? Think about that true happiness and find ways to get involved and follow through to get more of that happiness. Without true happiness you will go through life wondering what could have been.

2  Create a Dream Board

Some people think it’s corny, some swear by them. Cut out pictures of things you want, and things you want to achieve, and stick them on a big sheet of paper, or a small one if you aren’t making it public. It’s a visual reminder of what make you happy and what to strive for. If you don’t want to make it publically visible, keep it in a draw that you use frequently – that way it’s out of sight but a constant reminder to you of what you want to change in your life.

3  Set Goals To Achieve Your Dreams

Now that you have worked out what your dreams are on your dream board: Holiday, better job, nicer car, get married, have children, retire, etc etc – you need to take action to put these goals in place. Set up short, medium, and long term goals. And then act on them, and that is what will make it happen. If they all don’t turn out, keep at it, or adjust your goals.

4  Let Go Of Your Regrets

Don’t hold back and don’t let anything hold you back. Regrets and negative feelings of what could have been have a tendency to be internalized, upsetting the balance of your gut and brain, and can lead to sickness. Be positive, move forward – history is history.

5  Do Something Out Of Your Bubble

Unless you try something new, out of your comfort zone, you’re never going to give anything a go. You’ll be living in your same old bubble, week in week out. It doesn’t have to be bungy jumping, but something that you’ve thought about but never had the gumption to go and try: make a speech in front of people; start walking to lose weight; go out on a girls night out now and then. It can be anything you don’t do now. Make a change to try something new.

6  Start Living A Well Balanced Life

You need your body and mind to be working together. Unless you look after your body, your mind won’t be clear. Exercise is the best way to clear your head and gain a positive attitude. It’s amazing what you start thinking about if you go for a run, or even a walk,: it’s not the negative stuff, it’s what you need to do, the positive things. Make a change and try it.

7  Face Your Fears

It’s easy to brush off our fears in the hope that they will go away and we won’t have to do anything about them. Your fears are only thoughts on your mind, they’re not real, but they manifest over time and then we believe them to be real. We need to take control of these fears – mind over matter – and not let them control us. Have positive thoughts and move forward.

8  Accept Yourself

You are who you are. You are a combination of genetics and environment. Everyone has something that they would like to change about themselves – if they are truthful and think hard about it. The only person that can make that change is you. A negative attitude to your, let’s call them ‘self-faults’ is only going to make them worse. You need to be positive and want to change, and then you will.

9  Live In The Moment

Don’t dwell on yesterday; don’t be negative if you have a bad event or thought. Negativity only breeds negativity. Be positive and live in the moment, live for what will be, not what has been. The grass may be greener on the other side of the fence, but the only way you will know is if you make the effort to jump the fence. If it’s not greener when you get there, you’ve learned a good lesson and can keep moving forward anyway.

10 Show Gratitude

If you are grateful for what you have and what you can change, then good things will happen and you will see your life change. Your changes don’t need to be monumental, they may be small, but they are still changes, and hopefully changes for the better.

Change you attitude to change.

About the author: Karen Vickers is a Financial Adviser who wants people to learn how to take control of their money. You can also change your financial habits. A good start to understanding the financial habit change process is by downloading our Free Your Money Sense e-Book http://yourwealthvault.com.au/: “6-steps to Financial Security”.

10 Things To Do To Change Your Life Forever

We are surrounded by change, and the more you resist, the tougher life gets. Accept change, look at it as an opportunity to try new things, to meet new people, to challenge you.

Change can come upon us by way of unexpected events or by choice. It’s inevitable so grab it with two hands and see where it takes you.

1  Be Happy

What makes you happy? Really, happy. Is it a person, is it an activity? Think about that true happiness and find ways to get involved and follow through to get more of that happiness. Without true happiness you will go through life wondering what could have been.

2  Create a Dream Board

Some people think it’s corny, some swear by them. Cut out pictures of things you want, and things you want to achieve, and stick them on a big sheet of paper, or a small one if you aren’t making it public. It’s a visual reminder of what make you happy and what to strive for. If you don’t want to make it publically visible, keep it in a draw that you use frequently – that way it’s out of sight but a constant reminder to you of what you want to change in your life.

3  Set Goals To Achieve Your Dreams

Now that you have worked out what your dreams are on your dream board: Holiday, better job, nicer car, get married, have children, retire, etc etc – you need to take action to put these goals in place. Set up short, medium, and long term goals. And then act on them, and that is what will make it happen. If they all don’t turn out, keep at it, or adjust your goals.

4  Let Go Of Your Regrets

Don’t hold back and don’t let anything hold you back. Regrets and negative feelings of what could have been have a tendency to be internalized, upsetting the balance of your gut and brain, and can lead to sickness. Be positive, move forward – history is history.

5  Do Something Out Of Your Bubble

Unless you try something new, out of your comfort zone, you’re never going to give anything a go. You’ll be living in your same old bubble, week in week out. It doesn’t have to be bungy jumping, but something that you’ve thought about but never had the gumption to go and try: make a speech in front of people; start walking to lose weight; go out on a girls night out now and then. It can be anything you don’t do now. Make a change to try something new.

6  Start Living A Well Balanced Life

You need your body and mind to be working together. Unless you look after your body, your mind won’t be clear. Exercise is the best way to clear your head and gain a positive attitude. It’s amazing what you start thinking about if you go for a run, or even a walk,: it’s not the negative stuff, it’s what you need to do, the positive things. Make a change and try it.

7  Face Your Fears

It’s easy to brush off our fears in the hope that they will go away and we won’t have to do anything about them. Your fears are only thoughts on your mind, they’re not real, but they manifest over time and then we believe them to be real. We need to take control of these fears – mind over matter – and not let them control us. Have positive thoughts and move forward.

8  Accept Yourself

You are who you are. You are a combination of genetics and environment. Everyone has something that they would like to change about themselves – if they are truthful and think hard about it. The only person that can make that change is you. A negative attitude to your, let’s call them ‘self-faults’ is only going to make them worse. You need to be positive and want to change, and then you will.

9  Live In The Moment

Don’t dwell on yesterday; don’t be negative if you have a bad event or thought. Negativity only breeds negativity. Be positive and live in the moment, live for what will be, not what has been. The grass may be greener on the other side of the fence, but the only way you will know is if you make the effort to jump the fence. If it’s not greener when you get there, you’ve learned a good lesson and can keep moving forward anyway.

10 Show Gratitude

If you are grateful for what you have and what you can change, then good things will happen and you will see your life change. Your changes don’t need to be monumental, they may be small, but they are still changes, and hopefully changes for the better.

Change you attitude to change.

About the author: Karen Vickers is a Financial Adviser who wants people to learn how to take control of their money. You can also change your financial habits. A good start to understanding the financial habit change process is by downloading our Free Your Money Sense e-Book http://yourwealthvault.com.au/: “6-steps to Financial Security”.