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By Laura Higgins, Senior Executive Leader, ASIC*

Starting your career is an exciting time and building good money management skills will help you to set yourself up for the future. Here are some tips to help you take control of your money.

Do a budget

Working out your budget is the first step to managing your money. Ask yourself what you want to get out of your budget? Having goals help. You might want to set yourself up to move out of home and rent, save for a home deposit or build an emergency fund.

Having a budget shows you where your money is going. Get started by tracking your spending for a short period of time – ideally a pay cycle, but at least a fortnight. Some ways to track your spending are using an app, looking at your bank statements or writing your purchases down. Then you can work out what are your essentials and what’s left after that. It’ll also help you find hidden costs, like account fees or subscriptions you don’t use.

Once you know how you’re spending your money you can set a realistic budget. Don’t think of a budget as something that limits you, instead think of it as a way to free up your money to spend it on the things you really want. You can use the Moneysmart Budget Planner to get started.

Build up your savings

Getting a separate savings account is a good place to start. You can transfer part of your pay into your savings account, or ask your employer to do this for you, so you’re saving without even having to think about it.

If your everyday transaction account is with the same bank as your savings account, you may be able to round-up your transactions. This means your daily transactions will be rounded to the nearest $1 or $5, and the change then goes directly into your savings account.

Another way to build up your savings is to change some of your regular spending habits. These small changes can add up in the long run. For example, switching from a large latte to a small latte can save you around $1.50 a day. This means your savings could grow by around $500 per year.

Get to know your super

If you work full-time, part-time or casually, your employer must put a minimum of 10% of your pay into your super account on top of your salary. Your super fund then invests and manages this money until you retire. Remember that your super is your money and it’s important you know what’s happening with it.

The Moneysmart Employer Contributions Calculator helps you work out how much super you should be getting.

You can also grow your super by making extra payments yourself. Even small amounts add up over time, and voluntary contributions can reduce the amount of tax you pay depending on your circumstances.

If you’re starting a new job, you can pick your own super fund or join the fund that your employer uses. If you’ve worked before you might have multiple super accounts and it is a good idea to consolidate them into one account, so you pay less fees.

Check your payslip

Whether you’ve started a new job, or you’ve been working for a while, it’s a good idea to regularly check your payslip. Your payslip will show how much you earned, the amount going into your super account and any tax taken out.

Make sure you check your payslip closely – mistakes do happen and it’s important you know the right amount of money is being deposited in your accounts.

Know how tax works

Income tax is usually paid to the government from your earnings throughout the year. Your employer will deduct tax from each pay and send it to the Australian Taxation Office (ATO) on your behalf. At the end of each financial year, you’ll lodge a tax return with the ATO. You can do this yourself online through myGov or with the help of an accountant or tax agent. The Moneysmart Income Tax Calculator will help you work out how much tax you should be paying.

Compulsory repayments against your study or training support loan start when your repayment income exceeds the minimum repayment threshold. You can learn more about paying back your study or training loans on the ATO website.

Laura Higgins, ASIC

*In an endeavour to deliver useful and relevant content to our members across a range of topics, Optometry Australia partners with various organisations for specific expertise. Here, ASIC’s Senior Executive Leader Laura Higgins provides some finance tips to our younger members.

The information that Optometry Australia has provided is purely factual in nature and does not take account of your personal objectives, situation or needs. The information is objectively ascertainable and, therefore, does not constitute financial product advice. If you require personal advice you should consult an appropriately licensed or authorised financial adviser, accountant or taxation agent.

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