Marlene Scicluna is a proud bi-racial Indigenous Australian, born to a Ngunnawal mother and American father of European ancestry; she was adopted at birth by Maltese parents. 

As you farewell your teenage years and enter adulthood, saving may might be the furthest thing on your mind.  I recall the day I earned my first pay as a 16-year old: I hightailed it to the local music store and purchased my dream double-deck cassette player (yes, I am THAT old); least to say, my mother was not impressed!

As good as it felt to be independent and splurge my own money, I soon learned that my mother was right (yet again) and ‘money did not grow on trees’.

Living from pay to pay is quite stressful and the only way to lessen your financial woes is to develop good saving habits earlier on in life, particularly in your teens and 20s, as this will put you way ahead of those who start saving in their 30s.  It will also act as a cushion to fall on in times of strife.

I recall challenging times as a mother with a young family – myself still in my twenties – when I felt it hard to surface: school fees, a mortgage and life in general felt suffocating… money was slipping through my fingers with no savings to fall on.

Creating a plan

In fact, it is so easy to lose track of where your money is going. That’s why it can be useful to the time to work on a budget which identifies monthly income and expenses. Although it can be quite overwhelming, becoming familiar with your money situation can help to determine where you want your money to go, instead of wondering where it went.

It helps to eliminate any insignificant costs; for example, cooking meals at home instead of eating out, quitting smoking (or smoking less), condensing subscription services or searching for cheaper options.  Believe me, even small sacrifices add up!

Now that you have a budget, create a calendar showing your due payments, as this will help you stay on track and fully aware of what is coming up in the next month, with no surprises.

Three accounts for now and the future

Once that you are familiar with your financial position, it could be time to start working on your savings plan; this is where the fun begins!  I have three accounts and learnt you can set up a weekly or fortnightly direct transfer from your main account to the other two.

1. The obligatory account is the main fund for my income and expected expenses: it receives wages and pays the bills, groceries, insurance etc… This account also funds savings.
2. An emergency savings account funds unexpected expenses. Many people are faced with financial troubles because they do not make allowances for emergencies.  However, just setting aside $100 a week will build up to $5200 in 12 months time.  Ideally, this emergency fund should have three to six months of basic living expenses (based on your budget), covering any unplanned circumstances, such as losing your job.  I admit, this could be quite challenging; nonetheless, whatever funds can be put in this account will help.
3. Lastly, it could be worth thinking about a goal savings account for that something you wish for – be it travel or a specific purchase – and make saving fun. Simply saving $25 a week for one year will reward you with $1300.  Hence, I like to set the goal well in advance and watch the nest grow and the goal get closer.

Additionally, any windfalls from bonuses, tax refunds or gifts can go towards paying off any debts if, like me, that’s what you decide. As for the rest? It’s distributed between the two savings accounts.

I find consistency and discipline are two important factors in achieving a good money position, regardless of your income.  Once you commit to saving, it is much easier to achieve; every drop counts!

I think building wealth is all about choices. It’s about making money work for you, instead of spending it before it’s earned!  After all, even rich people are frugal with their money and plan their spending and saving.

This article is not personal financial advice.