When it comes to the world of finance, we tend to split the world into two different kinds of people. Those who save, and those who spend.

There are many things which separate these two types of people, but the one thing that is clear – are those who save, tend to get ahead.

Borrowing money can be a great way of getting ahead if you’re spending it on productive things, but often we don’t. As with everything, there is good debt, and there is bad debt.

The main thing which separates the savers from the borrowers, is generally they are smart with their money. They look for deals, they buy things on special and most importantly, they don’t spend money on impulse purchases they cannot afford to buy outright.

Impulse purchases do bring you satisfaction, at least originally, but then you forget about them. It is only a short-term sense of satisfaction. The problem is these types of purchases build up, a few dollars a day will soon turn into a couple of hundred!

Restraint is your one ally in becoming financially free.

We live in a time of very low interest rates and many Australians are making the mistake of spending the savings in mortgage interest from these low rates, by living it up on impulse purchases. This is a mistake and if anything, payments should be upped to reduce the principle whilst interest rates are low, because before long I can guarantee you, they will be up again. Many of us can talk to our parents about the 19% interest rate days!

The thing is, getting out of debt, getting rich, it does require hard work, at least initially. But after a while you do get used to it. The trick is to learn to say no – to say no to that toy your child is screaming about or even to that new flashy gadget on the market. Because it all adds up, both in terms of debt and in savings.

Try just 2 weeks without any impulse spending and take note of how much you would have spent and have subsequently saved. You’ll be surprised!


James Hancocks
Marketing Assistant

A student at the University of Queensland, James is currently studying a degree of Commerce and Economics, majoring in Finance and Business and Industry. With a  particular interest in the macroeconomic environment and international affairs, James seeks to use his knowledge of the financial industry and economics to provide practical advice on how to make everyday finances work.