Paul Clitheroe shares his tips for the new financial year

We all seem to get enthusiastic about our finances as June 30 approaches, but then we rapidly lose interest. Mind you, I do understand that money can be complex and tedious and we never seem to have enough of it.

But the best time to tackle money is right now, the start of a new financial year. You could also do this in January, but that tends to be a holiday time in Australia, so why not get your money sorted while it is cold and dark in July?

Despite the marvels of technology and a very rapidly changing world, the fact is that the basics have not changed since time immemorial. So the key things to do are:

1. The dreaded budget

Sorry about this, but you have to do it, and it has to actually reflect what you really spend, not what you like to think you spend!

Go online and use the free budget planner at MoneySmart.gov.au. It will rapidly reveal your money strengths and weaknesses. If you are spending more than you earn you need to do something about it.

2. Fix your debts

I am not vaguely interested in your credit card with frequent flyer points if it is costing you 20% or more on the outstanding balance each month.

Forget the free toaster and change to a cheap card. Then have a plan that links to your budget to get credit cards and expensive personal debt paid off. No excuses.

3. Save on a regular basis

This also flows from your budget. Sure, get rid of high-interest debt first, but you will get nowhere without surplus income. No miracles here: once you have some savings and can save on a regular basis, the only true miracle of money - compound interest - opens up to you. Let me be clear: no ability to save means zero progress.

4. Plan to grow assets

This flows from the three tips above. They lead you to this very nice place where you can start to look at investing, possibly property, shares or topping up your super. Small steps on a regular basis create wealth. No magic here, just common sense.

5. Invest in yourself

Your skills are the key to earning better income and creating wealth. Take a course, learn online, see if your employer supports the cost of out-of-hours education. Opportunity in a rapidly changing world comes to those who are best educated and best prepared. Be one of those people.

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