5 Changes I Made to Become Good With Money

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Ever wondered how to be good with money? Like someone who can pay for their groceries (or beer) in cash and not need to borrow money to take a vacation? Yeah? Me, too.

I could not fathom how people who earned the same income (or even less than me) were able to live good lives without debt. How is that even possible? Let me tell you a story.

$50,000. My magic number. 

If you had told me twelve years ago that I would one day have (more than) $50,000 to my name I would have laughed in your face before taking a deep swig of my $5 beer at the pub (where I was drinking during the day).

‘Yeah, right’!! I’d be thinking to myself, ‘I don’t even know how I’m going to pay for my next pint’**.

I was terrible with money. I paid for everything with credit cards or personal loans, saved nothing and spent hundreds of dollars on my social life each weekend.

I’d come to accept that I would always live hand to mouth.

I never believed I could one day be good with money, able to save thousands of dollars to travel the world and build a rental property portfolio.

I remember saying to anyone who would listen that “I can’t save money, but I’m excellent at paying off debt“.

Which was true. Having debt repayments to meet gave me a false sense of financial superiority, I’d never miss a payment on my loans, so therefore I was good at managing my money.

Now, I look back and shake my head, but at the time, it made perfect sense. I was finding a way to justify debt, so I wouldn’t have to do the hard work of eliminating it altogether.

How I Got Out of Debt and Became a Saver

So what happened to the girl who couldn’t put aside anything on payday? How did she get to the position where she could save thousands of dollars to travel the world?

It’s really simple – I made the decision to change.

Why? I was working an office job which paid OK, enough to indulge my handbag addiction and pay my bills.

I was also living in Sydney, Australia, one of the most expensive cities on earth. All I could see in my future was an endless cycle of working to pay bills, rent and buy handbags.

I wanted to travel. But I had no savings and travelling seemed like an unattainable dream.

I hit rock-bottom (yes – bad money management is as dangerous as drugs or alcohol) when I had to take out an unsecured personal loan to pay a tax bill I had been avoiding.

I remember sitting in my accountant’s office and crying. How on earth was I going to pay a $5,000 tax bill? I didn’t have a penny to my name. The answer – more debt.

Harsh realities

Filling out the income and expense details in the loan application form was the kick in the arse I needed.

That was the first time I had actually written out my entire financial position. I had always written budgets for weekly expenses (which never included a saving component) but I had never taken it that one step further.

The reality was soul-destroying. I was 23 and in debt up to my eyeballs.

Hardly the bright future I had planned for myself when I emigrated to Australia two years prior.

The income side of the equation looked OK, but I was spending hard!

I had paid for a three-month backpacking trip around South-East Asia with my credit card, withdrawing cash from ATM’s in Thailand, accruing massive interest bills.

My Thailand ‘Graduation’ AKA burning money on a useless piece of paper.

I even bought a fake college degree in Bangkok, just for the laugh. Yep, I’d spend $72 for a laugh.

Back in Sydney, I’d spend at least $200 each weekend (sometimes more like $350) on alcohol, cigarettes, entry to clubs and white powder that went up my nose.

I wanted to travel, without debt this time. Things had to change.

5 Changes I Made to Become Good With Money

1. Budget

To make the new loan repayments I had to write a proper budget, with categories for debt repayment. I also wanted to have a little in savings, just in case.

Paying a $3000 credit card debt was my primary focus, so I used the debt snowball method.

2. Cut Expenses and Increase Income

Living in a shared house meant rent was cheap. I also started to meal plan and stopped eating out every night.

I signed up for casual work pulling pints (which made a nice change from drinking them) at events and concerts and babysat for parents from my office.

When the holiday season came around I applied for a casual retail job working weekends and late nights. I worked seven days a week to get out of debt.

(Pro-tip: The Holiday season is the best time of year to boost your income – here are some of the best ways).

Weekday evenings were reserved for focus groups and mystery shopping plus I took paid surveys whenever they came my way. Everything I received from my extra jobs went towards my credit card debt.

3. Start saving

I was also paying myself $10 per week. That money was going straight into a savings account.

I needed to have that little something there, just to feel like I was advancing my financial future; debt repayment alone wasn’t enough motivation.

4. Come to terms with my debt

To physically atone for my debt I would pay the extra credit card repayments in cash at the branch.

Sometimes I would stand in line for 25 minutes holding hundreds of dollars, dreading being called to the teller to hand it over.

It felt like I was giving the bank money for nothing. I knew I’d spent it, but somehow it didn’t feel like I’d spent this much.

The irony was not lost on me – had I used cash for purchases I wouldn’t be wasting half of my lunch break in a queue lamenting my wasteful ways.

5. Learn about money management

After a year I had paid off the credit card. I also had over $500 in a savings account. It wasn’t much but it was all mine.

That was the turning point for me, I knew I was capable of doing anything I put my mind to. I began to get educated in money management from library books and websites.

I had a new money mindset and now understood that money was a tool which I could use to improve my life. For the first time in ages, the future looked exactly like I’d pictured.

** In case you’re wondering how I paid for that next pint of beer, I went to the bank nearby the pub and withdrew cash from my credit card, accruing huge interest bills and cash advance fees. Tut tut.

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About Emma Healey

Emma is a recognised family finance and budgeting expert and founder of Mum's Money. Her advice has been featured in Readers Digest, Yahoo Finance, Lifehacker, The Simple Dollar, MSN Money and more.

6 thoughts on “5 Changes I Made to Become Good With Money”

  1. I enjoyed reading about your journey. I feel as if my husband and I live paycheck to paycheck too. Your words are inspiring and I hope to read more.

  2. I have recently started working on our budget. I read about people who have successfully gotten out of debt and it gives me hope of someday being able to not worry about finances.

  3. Thank you for your inspiring story. My best friend and I we’re in a debt free relationship until he graduated from college, got his first real job, and made fantastic money. That’s when he realized he could buy basically anything he wanted and I could as well. Needless to say we got a credit card for emergencies and now 6 major cards and 5 store cards with $18,000 combined debt we need to get a handle on our spending. I love your ideas and started the snowball method last month. Well this month we overspent and the cash we threw at the low balance card disappeared because we used the card. Do you have any ideas on how to stop this from happening? Any help would be greatly appreciated!

    • Thanks for your comment Lisa! Sounds like you’ve got a great plan. So with the low balance transfer card (I did the same thing) I never ever used it. I gave it to my partner and he kept it away from me. If you don’t have anyone to give it to maybe put it in a block of ice in the freezer, or cut it up. Another thing I did was call the card company/bank EVERY TIME I made a repayment and got my total limit reduced. So if I made a $100 repayment, I rang the company and had them reduce my credit limit from $3000 to $2900 etc. The first few times they tried to talk me out of it but after a while, they gave up. It was the only way I managed to kill that debt.

      Also, give yourself grace to mess up. It happens. But you’re on the right track. So long as you have the mindset down, it’ll all work out in the end.

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