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Personal Finances – laying good foundations for personal success

Financial freedom from debt and good financial management of our personal finances, so we can enjoy our life and provide our loved ones with a happy and comfortable lifestyle, is what most of us seek. And like all life’s journeys we need to start from the beginning, with good planning, determination and commitment.

Unfortunately good financial management was not something that we were taught in school, and unfortunately it is still not given the attention it deserves in schools today.

Taking time to learn the foundations of good financial management, whether it be for your personal finances or your business, is time well spent and an investment in your future happiness and peace of mind.

To help get you started, here are a few of my personal mantra’s that have served me well.

I know, I know, it is much easier said than done. BUT, it is essential.  And if you are not spending less than you earn then you have over committed yourself and something will have to be given up for now.  You cannot achieve financial success unless you spend less than you earn.

Just paying your bills on time is not what good financial management of your personal finances is all about.

It is fundamental that you pay yourself first, to invest in your retirement and to save for a rainy day. Money needs to be set aside for unexpected events and saved to make sure you have enough to fund your retirement.

So open up an additional bank account and save a portion of your weekly income for those imminent rainy days, and put aside and invest a portion of your weekly income to build up your retirement nest egg.

Don’t just set and forget, and definitely don’t just ignore the numbers.

Regularly review and monitor what you are earning and spending, what you are saving and your debts. Calculate your net worth at least annually.  If you keep your personal finances at front of mind, constantly monitoring and reviewing, you will be rewarded with financial success.

Does the thought of managing your finances scare you? So much so that you avoid thinking about your finances?  Are you a saver or a spender?

By understanding your money history and spending habits, you can work towards putting in place strategies to overcome your fears and bad habits and achieve the financial success you are striving towards.

If cash is King, then credit cards are the Devil.

Debt is a necessary evil which when used intelligently, can help you to grow your financial wealth, but it can consume a large portion of your income. So you want to make sure that most of you Debt is “good” debt, and only a small portion of your income is going to “bad” debt.

“Good” debt is an investment that will grow in value or generate long-term income, for example the loan on an investment property.

The best example of a “Bad” debt is credit card debt. Most things you buy on a credit card won’t appreciate in value.  The interest rates on credit cards are excessive, and paying just the minimum monthly balance will further inflate your interest owed and take you years to pay off.  Credit card debt is “bad” debt and you definitely don’t want a large portion of your income being wasted on “bad” debt.

Unless you pay off your credit card fully each month, or cut it up into tiny little pieces and throw it in the bin, you will be unlikely to achieve good financial management of your personal finances.

Just as going to school expanded your knowledge and opened up opportunities, growing you financial knowledge will increase your financial confidence and know-how to improve your personal finances.

Whether it is traditional books, ebooks, magazines, or digital content; there is an abundance of information available to you to grow your financial knowledge.

Some of my favourite authors have been Noel Whittaker, Rick Edelman, Suze Orman and Robert Kiyosaki.

Source: Paul Baggetta

Paul Baggetta is the Founder & Principal of Baggetta & Co. Paul Baggetta has been a Taxation Accountant for over 36 years, a Financial Planner for over 18 years and in 1993 qualified as a Real Estate Licensee, holding a Triennial Certificate (currently not trading), and operated his own Real Estate business for property investment clients for over 5 years as a second business.

 Financial planning services provided by Paul Baggetta as an Authorised Representative (No. 261469) of Capstone Financial Planning Pty Ltd. ABN 24 093 733 969. Australian Financial Services License No. 223135. 

Taxation & Accounting services provided by Paul Baggetta as a Registered Tax Agent (No.61487008) and is a Member of SMSF Association, IPA & NTAA.


The material and contents provided in this publication are informative in nature only.  It is not intended to be advice and you should not act specifically on the basis of this information alone.  If expert assistance is required, professional advice should be obtained.

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