Money made Simples

by Melissa Browne

Chapter Four

Everyday finances

Whether you’re trying to run a marathon, learn a language, start crocheting teapots or begin anything new, you don’t generally become an expert overnight.

When you first start out, the idea of trying something new is exciting and motivating. But that sheen soon wears off when you realise there’s cramping, technicalities like masculine and feminine pro-nouns and you’re allergic to wool.

That’s why it’s important when you start something new to figure out a plan for how you’re going to succeed day to day. If you’re running a marathon this might involve hiring a running coach or registering for a 12-week running plan. If you’re learning a language it might involve downloading an app, signing up for classes and discovering meet-ups where you can practice. And if you’re crocheting it might involve starting with something small so you see it through.

If you want to succeed at this new skill, yes you want to figure out all the above.

But you also need to work out how to fit it into your everyday life.

It’s no different when it comes to money.

So far, you’ve started to design the path you want to create for yourself. You’ve begun to work out a plan for what the next 12 months will look like. But what about the everyday? Wouldn’t it be helpful to have someone hand you some useful tools so that you don’t stumble at the first hurdle and maybe even help you clear the path?

It might not seem sexy and exciting, but what we do with our finances everyday can dictate whether we reach that life we want to design for ourselves. That’s because too many of us are trying to look for the magic bullet, the million-dollar business idea or the secret to riches but we’re neglecting the everyday basics.

many of us are trying to look for the magic bullet, the million-dollar business idea or the secret to riches but we’re neglecting the everyday basics.

What I know is that part of the problem is there’s simply so much information about what we should and shouldn’t be doing and most of us, if we’re completely honest, aren’t interested enough to disseminate it.

But what if you had a cheat sheet? A list to work through so that you could get help with your everyday finances with tips on how to hit your goal faster?

Consider it done.

Below are some everyday finance basics that can help you reach your goals safely. It’s only the basics and sure, it’s not going to cover everything (we’ll cover more when we get to chapter six on maintenance) but it will give you a head start to ensure you have the ground work and the training completed so you can set off on your financial quest.

Bank accounts

If you pop a block of chocolate in front of me I promise you I’ll eat the lot. If you pop two chocolate squares down and hide the rest then sure I’m still going to eat the lot. But that’s going to be the two squares in front of me rather than the entire block of chocolate.

What does this have to do with bank accounts?

Most of us don’t have the willpower not to overspend. Or we lift our spending to the amount we’re earning every-time we receive a pay-rise. Or a few of us are hoarding and not spending because we’re scared to touch our pot of savings which means we’re not enjoying today.

By setting up multiple bank accounts, it’s like hiding your money from yourself. It’s like placing the two chocolate squares in front of you and hiding the block. Plus, it gives you permission to enjoy what’s in front of you without guilt, knowing you have a plan in place.

What bank accounts should you hold?

I believe at a minimum you should consider an Everyday Account, a Bills Account, a Splurge/Holiday/Fun Account and a Savings Account. If you have a mortgage, your savings account would be an offset account attached to your mortgage or the mortgage itself. For the rest, you want bank accounts with low fees.

How much should you allocate to these accounts? Well, that depends on the life you’re designing for yourself and your 12 month goals.

Bills account: The amount you regularly transfer to your Bills Account should be fairly easy to figure out. This will include your mortgage/rent, electricity, gas, phone, internet, school fees, rego and insurances.

Once you’ve worked out what bills to include in your Bills Account, you’ll need to work out how much to transfer to this account each pay cycle to cover them. For example, if you’re paid fortnightly, you would work out the annual amount of each bill and then divide this annual amount by 26 to reach the fortnightly amount. For example, if you pay electricity monthly and your average bill is $600 to figure out the fortnightly amount you would first work out the annual amount: $600 x 12 = $7,200. And then work out the fortnightly amount: $7200 / 26 = $276.93. You’d continue doing this for each bill until you had the fortnightly amount and then you’d total them all up to work out the total to transfer each pay cycle.

Notice I’m not including gym fees or pay tv here? That’s because this is discretionary spending and belongs in your Everyday account.

Savings account: the amount to transfer regularly to your savings account is worked out next. This should be the amount you figured out in your 12 month goals.

For some of you, there will be no savings amount but instead, this will all be paying off credit card debt. That’s ok. Notice we’re doing the savings amount second? That’s because if you’re serious about the life you’re designing, we need to prioritise this amount rather than just save what’s left over after you’ve allocated absolutely everything else.

Holiday/splurge/fun account: the amount to transfer regularly to your splurge/ holiday/fun account amount can also be figured out from your 12 month goals. Or you might decide what you’d like this amount to be each year and work out how much that means you’ll need to transfer each pay period.

Everyday account. What’s left is your everyday account balance.

This is what you have left for everything else. This includes food, entertainment, eating out, coffees, gym membership, clothes, hairdressers and more. If there’s not enough here then look at what you have allocated to the other accounts. Or consider ways you can add more income to your pot.

The trick is to not resort to credit cards or raiding other bank accounts but instead, when the Everyday Account is empty that’s it! It’s time to head back to living like a uni student for the few days until your next pay cycle. Remember when you had to eat rice and beans for a few days because that’s all you can afford and now we hand over the plastic instead? It’s time to break that habit. That’s because, this method only works if you limit your discretionary spending to what’s in your Everyday Account. And leave the other accounts for what they’re intended for.

Of course, the good news is that the funds in the Everyday Account should be guilt free spending.

There have been many suggestions as to what should be contributed to each bank account by different finance experts. At the end of the day, it’s up to you and the life you want to design for yourself. But don’t cheat yourself. Make sure it matches up to the life you want to design and your 12 month goals from chapter one and two.

Other Bank Accounts you might want to consider are a Life Account (for when life happens such as the fridge dying or the car needing to be fixed. If you have a mortgage, you’d keep the buffer there). If you’re a couple I would recommend your own personal bank accounts. That’s because you want to retain some independence and not have to account for every single dollar you’re spending and why you’re spending it.


Now, figuring out how much should be allocated to each bank account is Step One. Step Two is automating the regular transfers so amounts are automatically sent each pay cycle from your Everyday Account to your Bills, Savings, Splurge and other accounts.

Remember the example of the chocolate block? If I was told to break off a couple of squares, leave the rest of the block on the counter and don’t eat it, I can’t promise you I would. That’s a lie, I can promise you, I would eat the entire block by the end of the day. That’s because when I start eating chocolate I have absolutely no willpower. But by popping a couple of squares and hiding the rest I’m only eating what’s in front of me.

We’re doing the same thing for your finances.

Think about two other things that are automated in your life and for the most part, work beautifully – mortgage payments and superannuation.

There’s a reason why mortgages and superannuation are so effective. They’re automatic payments that we aren’t relied on to transfer ourselves. Our mortgage is deducted by the bank from our account automatically and our superannuation is paid by our employers directly to our super fund/s. Because it happens automatically we simply accept it.

We need to do the same for our finances. That’s why I’m such a fan of setting up direct debits from your Everyday Account the day after your pay enters, to your other bank accounts.

It’s like hiding the chocolate block from yourself, knowing you can enjoy the couple of squares guilt free without overindulging.

Budgets and trackers

I am not a fan of budgets but I am a fan of tracking. That’s because budgets are like diets. They’re generally tight, restrictive, limiting and you break out and splurge the minute you finish them. And often put the weight on (and more) that you lost in the first place.

Budgets are no different.

Instead, by setting up more than one bank account, by automating your transfers and then tracking your spending, you can be mindful about where your money is going.

This means if you’re comfortable that you’ve spent $350 on coffees this month because that’s your splurge and you’re allocating your funds everywhere you intended them to go then perfect. Enjoy those coffees guilt-free. But if the amount makes you feel a little ill then you can choose to adjust your behaviour. Similarly, you might be surprised that you’re spending $25 each month on an app that you haven’t used in six months and had no idea you were still paying for. By tracking where your money goes, you can make choices as to where your money is going.

Many banks have automatic tracking as part of their internet banking. If you’d like another, Compare the Market has a great Budgeting Calculator to help track your savings goals.

How to find more cash

Let’s say you’ve worked out your bank accounts, how much to transfer to each one and the balance you want them to be in 12 months. There’s only one problem. You’re about $250 short. Every month.

This means you have a couple of choices.

Firstly, you can choose to reduce your spending.

This may mean cancelling gym memberships you’re not using, trying to find better deals with insurance, telcos and energy providers, asking your bank for a reduction in your interest rate, switching to a bank for a better deal and more. (By the way, these are all great things to be doing regularly even if you do have enough cash).

Secondly, you can also choose to increase your income.

This might mean asking for a pay rise, starting a business on the side, selling some unused items in your wardrobe, garage or the kids cupboards on ebay, taking on a boarder, getting a second or third job. Or you might moonlight as an Uber driver, Deliveroo deliverer, pop your granny flat on Airbnb, offer your services on Airtasker or Fiverr, tutor or be paid for surveys. Truly, the ways to earn some extra income today is limited only by your imagination.

All that’s left is for you to start.

Figure out what bank accounts are missing for you, work out what amounts you should be regularly transferring, download an app and start playing with it and start figuring out how you can find more cash. There are worksheets to help you and a puzzle to help you creatively find ways to save more cash. Alternatively, you can head to and start saving by finding a better deal across your home loans, car insurance, energy provider and more.

Moonlight as an Uber driver or Deliveroo driver

Starting a business on the side

Ask for a pay rise

Selling some unused items in your wardrobe, garage or the kids’ cupboards on ebay

Offer your services on Airtasker, fiverr, tutor or fill out surveys online

Pop your granny flat on Airbnb

Chapter 3 - The good, bad, and ugly of debt
Chapter 5 - Investments