Back to Blog

Money 101 Simplified

financialliteracy getgoodwithmoney learnaboutmoney letstalkaboutmoney moneymindset May 11, 2022

Hello!  If you’re feeling overwhelmed by all the information thrown at you every day, then you’re not alone.  There is so much data and information to consume as part of work, but then there is everything in your home life as well (and once your kids go to school, that information overload escalates!).

 Keeping the money side of things simple is something I have been focused on for almost 10 years.  I even hired, then fired a Financial Planner and decided to do the Diploma in Financial Planning just so I could make sense of the basics!  I certainly don’t recommend that path, so I’ve simplified what I consider to be the money fundamentals that if we all knew, would save us time, money and improve our lifestyles!

I call this the Five Money Pillars – Income, Spend, Save, Invest, Legacy.

In terms of logical flow, our focus on money is usually in that order, but not always.

One thing I’ve noticed over the years is the amount of information and training out there about investing.  There are lots of people teaching share investing, property investing and now even bitcoin investing! 

But, what if you’re swimming in debt, can’t seem to get on top of your spending, and you really need a raise and haven’t increased your income in a few years?  These are the foundations that should be set up first, and then you can really get stuck into the kind of investing that is right for you.

And even before all that, what kind of life do you really want anyway?  Even if you had all the money you needed, what do you want it for?

Everyone's money journey is different, and some lucky people are taught about money as children, either by observation or direct instruction (usually by their parents).

My money education began in Primary School with a Commonwealth Bank "Key Card" account being opened as part of a broader school initiative.

The only concept to do with money that was consistently reinforced to me as a kid was to Save, not how to Spend, Invest, or Donate. The concept of income was always there in the background - we were at school to get a good education so we could go out and get a good job (to earn and income). I'm guessing that this was a similar message that you got as well.

Is that really all there is to teach about money - how to earn Income and Save? No way. As a diligent student I followed the saving principle, and once I began working at age 15 I saved a large portion of what I earned (the beauty of still living at home – few expenses). So, Income and Save were in hand, but I soon realised that these two alone would not provide me with the lifestyle and future that I wanted. What about Spend, Invest and Legacy?

And, once I had money, what did I actually want it for anyway? Understanding WHY you want money can be a huge leap towards where you want your money journey to take you. The Why question underpins each pillar.

I'll cover off on each of these Five Pillars separately, as they are each important, and collectively combine to symbolise your personal money journey.