Get Your Finances In Order


Get Your Finances In Order

  “Financial literacy is just as important as the other basics.”
– John W Rodgers Jr

I am going to be very honest with you, I have never had much money. I moved out of home at 15 years old, and while I completed my schooling, I survived off of government support payments, part time work at McDonalds, and to fill the gaps in income: charity handouts.

I would regularly walk down to the local community support center to pick up two shopping bags full of donated produce that was about to go off. Once a week I would take ‘how to cook classes’, not because I didn’t know how to cook, rather because the classes were free and I got to eat the food at the end. The days that my school provided morning breakfast were a Godsend.

I don’t say this for sympathy, rather to show you that although I struggled financially, I was able to survive, and significantly improve my situation.

I want to use the knowledge that I gained through practical experience of thriftiness, combined with the information gained from countless books on financial literacy, and the advice I received from proven experts, to summarise the best ways to get your finances in order.

I know that money is a dirty topic. In most circles it is considered a major fax pas to talk about how much or how little you have. It can be an offence to even offer financial support to someone who is struggling, and on the flip side, it can be extremely embarrassing to ask for financial assistance.

It is vitally important that we all learn to manage our money.

For better or worse, we live in a money driven economy. We trade our time for money, and then trade that money for the necessities of life. Anything left over is traded for pleasure or saved to assist us with future calamities.

Unfortunately, most people have little to no idea about how to manage their money. They then struggle to pay for what they need, overspend on what they want, save nothing for the future, and become weighed down with excessive levels of debt. This is the trap of modern society – the rat race. The only solution to this problem seems to be to work more hours, get more money and pray that it will all somehow work out. So people slave away at jobs that they are not really happy with until a pay rise comes, but rather than saving their new money, they treat themselves to a new car, a holiday or the latest gadgets.

‘I have been working so hard recently, I deserve a treat …’

Then, when the dust settles, they find themselves in the same situation as before, on a larger income yet still somehow struggling financially.

This situation is compounded with the additional financial stress of raising children. Mum has less ability to work as the pregnancy and early child rearing take her out of the workplace. She can return, but now needs the support of family for babysitting or must pay for childcare services. Dad (if he is in the picture) is under extra stress and is now supporting both the newborn and his partner while she recovers. The cycle of financial problems is repeated with the children as they will replicate what they see and learn from their financially illiterate parents.

I know that the above scenario is grim, but it is a reality for many working households across the western world. The situation is far worse when there is mental illness, addictions, trauma or a broken home thrown into the mix.

It is unsurprising that financial problems are one of the major contributing factors towards mental health issues, family disruption and social instability.

With that in mind, I would like to share with you some of the general principles that have helped me to survive the financial struggles of my youth, and continue to enable me to live a comfortable (yet quite moderate) existence, while having the freedom to start following my dreams with projects that I value (like writing this book for example).

Spend Only On What You Value

I value my time. I use it to read, write and train. I use it to spend time with my family. All of my money goes towards those things, at the cost of most everything else. My car is functional, but nothing special. My clothes are ok, but they are far from fancy. I don’t purchase the latest gadgets, accessories or jewelry. Most of what I own is second hand.

I am not embarrassed to say these things, because I know who I am and what I value. I put the small amount of money that I do have towards the things that bring me true happiness and sacrifice in all of the other areas.

Spending money is a trade-off between value and societal pressure.

Don’t get me wrong, I would love a new car. But I am just not willing to sacrifice the money to get it. Because in reality I wouldn’t be sacrificing money, I would really be sacrificing my time (in order to earn the money) or other aspects of my life.

If I were a car person, fashionista or tech nerd, this chapter would be different. I would be taking about how I afforded a new car (at the cost of abstaining from a gym membership, quality food or family time). My friends that are into cars joke about my ride, but it is all in good fun, they know I couldn’t care less. In fact I laugh at them for wasting so much more money on something that has exactly the same functionality as my car. They counter back that I ‘don’t get it’. Perhaps I don’t, but they ‘don’t get’ my choices either.

It is all a matter of values.

I want to clarify that I am not advocating that you follow my values. Rather that you first work out what you really value and spend your money on that. Give up the superfluous spending on things that you really don’t need, or are just buying to keep up appearances. It is costing you so much more than just money.

If you know who you are and what you value, focus your spending there and cut spending elsewhere.

In order to spend your money on what you value, you need to first determine where your money is currently going, and where you would prefer it to be going.


Warning: This activity may be distressing. However if you want to get your finances in order, it is vital that you undertake it.

Take stock of all of your current expenses and note them down, on a per month basis.

This will involve some math. For example, if your bill is quarterly, divide it 4 to get the monthly amount. If your bill is weekly, multiply it by 52 and divide it by 12 to get the monthly amounts.

You may need to look up bank statements, old bills and tax returns for the information. For anything that you are not sure of, make an estimated guess (you can always refine these figures when you have more information). Add any expenses that I have missed, and don’t include the expenses that don’t apply to you.

The goal is to see where your money is actually going.

Keeping your head in the sand will not solve your financial problems, in all likelihood it will make them worse.

 What is your current monthly spend on the following:

- House rent/Mortgage Repayments
- Rates
- Car Repayments
- Car Maintenance
- Petrol
- Public Transport
- Water Bill
- Gas Bill
- Electricity Bill
- Mobile Phone Bill
- Internet Bill
- Insurance
- Private Health Care
- Personal Loan Repayments
- Credit Card Repayments
- Technology Repayments
- Pet Registration
- Pet Food
- Emergency Vet Services
- Subscription services (Netflix, UFC TV, Audible, Magazines etc).
- Gym Memberships
- Groceries: Food
- Groceries: House Maintenance
- Eating Out
- Coffee, Alcohol, Drugs, Smoking, Gambling
- Entertainment (movies, events, sport, pay-per-view)
- Travel
- Clothes
- New Gadgets
- Beauty Products
- Impulse Purchases

Once you have completed this list, review each item in detail. Ask yourself: Do you really need it in your life? Do you value what it brings? What would happen if you made a change or gave it up completely?

Do you really need such a new car/phone/house? Is the on demand movie streaming service really adding value to your life? Do you actually enjoy going out for food or would you prefer to have the money go towards a holiday or a gym membership? Could you change some habits to reduce some of those costs? Is there a free alternative? There are no right answers here, other than to make you aware of where your money is going, and to determine if you are happy about those decisions.

It would be terrible if you were struggling financially, not because of a lack of income, but rather due to a lack of knowledge about your spending habits.

If your answers reveal that you are not happy with where your money is going, make some changes. When you are living your dream, or at least moving closer towards it, giving up something that you really don’t value will be a nonfactor.

Get Out Of Debt

The interest repayments on credit cards, cars, technology, houses and personal loans can chip away at a lot of your income without you realising it.

If you are paying 10% interest per year on a $10,000 loan, it is costing you $1000 each year. That money is not reducing how much you owe on the loan, rather it represents what the bank is charging you. You also have to pay back the principal, your initial $10,000, on top of the $1,000 yearly interest repayment.

Therefore if it takes you five years to pay off the loan, you will end up paying thousands of dollars more than you originally borrowed. The reason it may not seem that significant is because the weekly interest repayment is only $19.23, thus the day to day impact of the repayments may not be felt.

However unless you spend your loan on an investment, debt money is dead money. Until you pay back your loan, you are shackled to it. Forced to constantly pay the bank back until they have all of their initial loan returned to them. This is one of the main ways banks make money, by selling it to you.

If you want a new car, but can’t afford it with your savings, they will gladly lend you the difference. You are happy because you don’t have to wait, you get the car now. The bank is also happy, because they know that you will give them back far more than what they gave you.

The bank also knows that if you default on the payments, they will sell the car, and still chase you for the remaining money owed on the loan. Meanwhile if you keep the car, it is steadily going down in value, often being worth less than what is remaining on the loan. If you decide to sell it to pay off the loan, you will often find yourself still owing money to the bank for a car you no longer own.

Income raises can also be a trap if spending raises with it.

Often people will get the raise, and then get a new car, house or gadgets. So despite bringing more money in, they are still in basically the same situation. Only now they are forced to maintain that higher level of income to support their new lifestyle.

It is vital that you review all of your loans, credit cards, and other interest bearing accounts and begin to pay them back as quickly as possible.

Start with the one with the highest interest rate first and speak to your lender to see if you can renegotiate them all into a single loan with a cheaper interest rate. Do your best to not take on any more debt*. This will of course involve you having to wait to get the latest gadget, but that may be a good thing. It will teach you if you actually value it, or were purchasing on impulse or through social pressure.

Waiting to buy saves you money because you have time to think over your purchases.

*This does not apply to investments. Check out the resources listed at the bottom of the chapter for a discussion of ‘good debt’, ‘investments’ and ‘making your money work for you’.

Cancel All Subscription Services

People often accumulate subscription services without realising it. Because the amount charged is often is small, the process of cancelling it can feel like more hassle than it is worth. Unfortunately this leaves people paying for things that they are not using or don’t really value.

If you cancel all subscription services, you will soon discover the ones that you actually used and value because you will feel the loss. Re-subscribe to those ones, and divert any savings made on the cancelled ones towards paying off debt, or spend it on something that you actually value.

Don’t Play ‘Pay To Play’ Mobile Games

Games are designed to be as addicting as possible. They can trap you for months, wasting both your time and your money. Traditionally they made money by charging you a once off fee to play up front. However the current trend is to now make the game free, and either run advertisements (that you can pay to remove), or charge you for ‘in-app’ purchases to get in-game upgrades and bonuses.

This is wasted money. Sometime in the near future you will stop playing that game and move onto the next one. It will be just as addictive as your current game, but it will be different enough to grab your attention.

All of the money you spent on the previous game is now wasted.

I’m not saying to never play games, I see the value in using them as a break or as a form of entertainment. Rather, I am advocating that you recognise your own trends and realise that it will be the same with this game as it was with the previous game and the one before that. Play mobile games if you need to, but don’t spend your money on them.

Sell Any Unused And Unneeded Stuff

If you are not using something, or you don’t need it, sell it. Although you may make a ‘loss’ on the item compared to its purchase price, selling it at least returns some of the value, to be reallocated into something that you actually value.

Anything that is sitting idle is worthless.

It is tempting to hold onto things out of sentiment or for a rainy day, but more often than not, these items are just clogging up space in our homes. I would prefer to trade them in for something that I actually want.

eBay, Facebook Marketplace, Craig’s List and other online market places make the process easy. Upload a photo, write a description and set an asking price and you are on the way to a sale.

My wife supplements our income through eBay selling. Not only is she decluttering our house, but is she also able to make some money on the side. Not an excessive amount, but enough to enable her to travel overseas and fund her ever growing coffee addiction (something that she values very much!).

As a side hustle it is perfect because she can do it from home while raising our son. What started as a small personal project is steadily growing as her friends and family regularly give her items to sell for them, in exchange for a small cut of the profits.

Give it a try, you are probably sitting on thousands of potential dollars!

Buy The Best Quality You Can Afford

Quality products last. If you have to buy something, it is almost always better to pay more for a better quality product that will last longer, than going cheap and needing to replace it again quickly. Although the initial purchase will sting, over the long run you will spend less and save you the hassle of replacing it.

When I worked at McDonald’s, I made sure to purchase shoes that were designed for a kitchen. Regular shoes are quickly eroded by the oil, salt and detergents that they are exposed to on a daily basis. Although my shoes were three times as expensive as regular shoes, they lasted literally twenty times longer in that environment. Over the long run, I saved hundreds of dollars on shoes this way.


If you can borrow a piece of equipment, share a subscription or trade assistance rather than paying for it, do so. Talk to friends and family and work out what you have and how it could be of assistance to each other. Borrow your neighbor’s lawn mower in exchange for mowing their lawns, and lend them your tools in exchange for help with a project later on. Beyond the money that is saved, this is a great way to develop social connections and a sense of community.

Track Your Spending

Knowing where your money is going is a great way of keeping hold of it. Similar to how tracking what you are eating helps you to eat better foods, tracking what you are spending your money on helps you to spend wisely.

If you know you will have to write down what you purchase, you will be less reckless with your money.

Tracking your spending ensures that there is a small gap for detached thought within the purchasing process. Furthermore you can easily review your purchases to see where you are actually spending your money, rather than relying on memory.

There are many ways that you can track your spending, including a variety of different styles of accounting books, software or apps. I prefer a simple hand written diary that tracks the date, amount spent and lists the item purchased.

Start A Budget

This involves first determining how much money you can afford to allocate towards particular activities, and then religiously sticking to those limits. This requires a lot of self-discipline, future planning, and money tracking.

If this approach appeals to you, you could consider speaking to your bank to open up multiple spending accounts (ask for them to wave any fees) so that you have separate ‘pots’ to draw from. Label one account ‘bills’, another ‘savings*’ and a third ‘pleasure’. When you get paid, allocate your money between the accounts based on what you have worked out you can afford to spend, and don’t draw from other accounts. Some workplaces will even allow you to split the payment of your wage into multiple accounts, making the process easier.

*For this example, make sure that your savings account pays you as high an interest rates as possible, or alternatively use this money to pay off any debts that you owe.

Establishing a budget and tracking your spending can be quite tedious to begin with, but it will give you a solid grasp over your financial situation. Take your time and ease into this process. As with everything, ‘Change Habits Slowly’ (chapter 3.5).

Learning to budget properly and track your spending is a learnt skill, so expect to make some mistakes and adjustments along the way. There is a real temptation to start with a very strict budget that dramatically limits your spending. Do your best to avoid this temptation. Most likely you will not be able to stick to the regime for long.

Instead, slowly increase your savings levels over time, do it slowly enough that the impact is barely noticeable. Finally, make sure that you align your budget with your values and goals. If you cut too much of the pleasures from your life, budgeting becomes quite challenging to maintain, and seems rather pointless!

“It’s not your salary that makes you rich, it’s your spending habits.”
– Charles A. Jaffe

I don’t advise that people attempt to get their finances in order by working more.

While a larger income would certainly help the situation, unless spending habits and debt levels are addressed, a larger income will simply result in more possessions and the requirement to work more hours to pay for them.

By all means, go for the promotion and change jobs for a pay rise if you want to; just choose to save or preferably invest that extra money rather than simply spending it. Your future self will thank you.

In the resource section at the end of this chapter I will suggest some good places to start educating yourself about how to get your money working for you through investments in property, shares, businesses and high yield term deposits.

Continue the conversation
What can’t you resist impulse purchasing?
Tweet @zacpphillips #impulse, with your thoughts.

Frequent Asked Questions

Q) Money causes me a lot of stress. I hate opening my bank statements and every time I pay on my card, I am filled with dread that it won’t go through. I earn a decent enough wage, but I still feel like I am struggling.

A) There could be multiple causes for your money related anxiety. However, keeping your head in the sand about your situation will not solve anything. Take some small steps to slowly take stock of your money and spending habits.

You first need to realise what is happening and then you will be able to take action from there.

Speaking to a therapist or financial advisor could also be an option to get some specific assistance with your situation. The therapist could help you with your psychological anxiety, and the advisor could help with the practical nature of your finances.

Any money spent on advice is money well spent!

Q) Surely working more will help me, more money could pay the bills, as well as afford my family and I more luxuries. Why don’t you suggest that?

A) For three reasons:

The first is that working more is a limited option. You only have a limited number of hours, and there is a maximum that you can be paid to work each of those hours. This cap provides an obvious limit that will eventually stop you from earning more money.

The second is that you have likely tried to work more, and yet are still struggling. If that approach worked, you wouldn’t be asking this question and you wouldn’t be struggling.

The final reason is a lifestyle choice. I don’t see the value of earning more money for luxuries if I have no time to enjoy them. Once I have the necessities of life, more money provides only incremental benefits.

This choice is based on my values, and I simply can’t advise people to work more, sacrificing their time for stuff.

I Will Teach You To Be Rich, Ramit Sethi
Rich Dad Poor Dad, Robert Kiyosaki
The Barefoot Investor, Scott Pape

Take stock of your financial situation: review your current expenses, and divert spending towards what you value. Pay off any debts starting with the highest interest rate first. Buy the best quality tools that you can afford and share wherever possible.

Chapter 4.3 of 'How To Get Your Sh!t Together' - Out Now eBook, Paperback & Audible - Sign up to my email list to get every chapter sent directly to your inbox the moment they are released.