You may not have much of it yet but money and its management will be an important part of your adult life. Money doesn't grow on trees and you need to be smart with it. Here are a few money basics to help you.

Managing Money

Budgeting

Budgeting is crucial to good financial health. Always have money left over each month after you pay your expenses. Microsoft Excel has some great templates to help you create a budget.

Discipline

The secret to a good budget is DISCIPLINE. I have seen some tremendous looking budgets - with fancy graphs and tables - but unless you follow through then they are just rubbish.

Arrange direct debits

If there is no money in your bank account then you are least likely to spend it. Don’t tempt yourself. Arrange payments to come out of your account the day after you get paid.

Rainy Day account

Start keeping money aside for rainy days. Aim to build up three months of savings. You will appreciate it one day.

Tips for saving

Money makes money

Too many people have their savings earning little to no interest. Open up a high interest online account and make your savings work just that little bit harder for you.

Government co-contribution

If you earn less than $31,920 and you contribute $1,000 post tax into super the government will match it dollar for dollar. Free money!

Talk to your bank

The major banks are great in teaching you how to save. Don’t let them talk you into getting a credit card. Make sure you also ask them for a piggy bank!

Dangle that carrot

It is hard to save if you don't have a goal to save for. Before you prepare a budget, write down a list of goals that you want to achieve.

Extra superannuation

The Government has warned that they are going to struggle to pay pensions for an aging population. The earlier that you can start putting extra in, the better off you will be. Make sure you keep all a track of all super funds in your name.

Late fees

You are giving away money for nothing by paying bills late or regularly having your bank account overdrawn. Poor bill paying may also affect your credit rating and restrict your ability to borrow in the future.

Credit Traps

Good debt

Only borrow money to make money. That is, only borrow to put towards assets, such as a house or shares, which increase in value. But make sure it generates more than the interest that you are paying.

Credit cards

Probably the best advice is to not have a credit card at all. Credit cards are bad news and get people into trouble. If you do have one then make sure you pay the amount owing in full each month and never increase your limit to bail you out. They also charge outrageous interest rates (up to 25%). Only spend what you earn.

Tax Issues and Tips

Tax File Number (TFN)

Without a TFN you will have more tax withheld than what you need to and you may not be able to receive certain government benefits. The easiest way to get one is through your school as you don't have to provide the Australian Taxation Office (ATO) with any documents to prove your identity because your school verifies them. You should receive your TFN within 28 days.

Tax planning

Kerry Packer once said that if don’t try to legally minimize your tax then you are a fool. Tax will be your biggest outgoing so spend time trying to reduce it.

Keep your receipts

The ATO motto is no receipt = no deduction so you could be costing yourself $$$ by not keeping those dockets!

Get a great accountant

Great accountants are like quantity surveyors ... they know where the boundaries are. Avoid paying too much in tax or leaving yourself to a visit from the ATO. And their fees are tax deductible!

What to Watch Out For

Identity crime

As it is an important part of establishing your identity when starting a new job or opening a bank account, it is imperative that you keep your TFN secure and NEVER reveal to anyone not entitled to it.

Online scams

Online scams are on the rise and are designed to trick you into giving away your money, passwords and/or personal details. Keep your cards and PIN safe at all times. Make sure your passwords are difficult and regularly update the virus software on your computer. Report any irregularities to your bank ASAP.

Read before you sign

Before you sign anything, always make sure you understand the basics of what you are signing. If you don't understand then ask questions. Never be pressured into signing or you might regret it later.