Financial IQ Test

Are you trying your best to get a handle on your money?

Here, Australian mums share their best money management advice – from simple systems to saving for the big stuff.

Push the Envelope

“I’ve been using a simple envelope system to help me budget since I was a teenager,” said Maria Tedeschi, mother of four children aged 15, 12, 10 and six. “My mother is a big fan of the ‘cash economy’ and I guess it stuck. ‘Save for things you want to buy’, my mother would always say.”

The envelope system is easy to set up – grab as many envelopes as you need, write on the front of each envelope the item you need to pay or save for and the target dollar amount, and literally place your dollar bills into each envelope throughout the month.

“The envelope system was helpful when I wasn’t earning a lot of money, to make sure I had enough money to pay regular fixed bills. It was also valuable for teaching me how to budget and set aside a small amount of money over a set period of weeks to reach my goal.”

No longer a struggling Uni student, Maria still runs her envelope system to pay for things that aren’t included in the weekly grocery list: haircuts, car service, kids’ dance fees, quarterly fixed bills or things she wants to save for.

“Even though I know I can easily transfer money into multiple accounts connected to my main bank account, I like using envelopes because it’s a visual cue and I can easily demonstrate to my children how the system works. My kids obviously don’t have any bills, but I have taught them to split their pocket money into long-term savings (bank account), short-term savings (to buy something) and the rest they can simply spend. It’s great to write on the envelope the target dollar amount and count the progress. My envelope system helps me to plan ahead, not overspend and not stress about money.”

Savings-savvy Kids

Author of The Joy of Business, Simone Milasas believes business should be fun and suggests parents make money fun for kids, too. “Travelling the world for business, I bring back foreign currencies for my son Nash, 10, to collect and enjoy. I have solid gold and antiques as investments and ask Nash what would be fun for him too.”

She suggests we give our children the choice to do as they wish with their money. “How would you feel if someone projected their expectations on you of what you were supposed to buy or do with your money?” she says. “We give Nash money, which at the moment all goes into a safe that we bought for him. When I asked him, ‘What does money mean to you?’, he said ‘When you save up, you can get more things and create more. If you spend it right away, you’re not going to have any.’”

She recommends adults and children put away 10 percent of everything earned into a separate account that they never spend. “By doing this, you’re sending the message that you are important, you’re worth paying, your desires come first.”

Kids can get creative about making extra money, like Simone’s friend who takes her kids to garage sales to find things they can sell on eBay and then save the difference for what they really want to buy.

School Fees

Price does not necessarily equal a great experience at a school for your child. Instead, pick a school based on your child’s interests, advises Penny Collicoat, founder of financial planning firm Women with Edge and mother of two.

“Are they a sporty or arty child? Do they like performing? Are they studious? Schools offer differing specialities, so match the school to your child and be open minded,” she says.

Private schools often offer discounts for multiple children or for paying fees in one lump sum at the beginning of the year, Penny notes. Is your child
gifted at sport, an instrument or intellectually? Scholarships are often offered from as early as the primary school years.

Single Motherhood

Cathryn Gross, Principal of Twelve Wealth financial advice consultancy and mother of three says cash flow is key for single mums.

“It’s my experience that women tend to put their children, employers and clients first and financial administration last. Who wants to work on a budget
in an Excel spreadsheet last thing at night? I’m a financial adviser and I put off all my financial jobs too!” says Cathryn.

Cathryn advises that once you know where you’re spending, you can work out where to save. Menu-plan so you don’t overspend at the supermarket; bulk-buy $10 books at Book Depository so you always have a great gift for the long list of parties your children attend and house-swap if you’ve got friends with young children to save on holiday accommodation. Check your mortgage – are you paying six per cent when you could be paying four per cent? Are you getting the kids vaccinated for free at the local council or for $100 at the doctor’s?

If your income falls, keep your details up to date with the government, as you may be eligible for more childcare benefits, and you don’t have to wait until tax time for them, says Cathryn.

“I’m a single mother and co-parent. We set up a joint bank account into which we both pay for all the child-related expenses like school activities, daycare and medical bills. If the kids need new clothes or soccer classes, we’re both in a position to make the payment. This reduces the admin load on me, but also means neither of us have to be constantly chasing the other for money.”

Starting Up

Start-ups appeal to women who may love to achieve something for themselves, especially after having kids, when we crave flexibility and our priorities change, says Lily Hii, bookkeeper and mother of two.

To make the most of small funds, do your research. “How much you need depends on your field of business. For my field, all I really need is my skills. I literally havea no capital at all, as I don’t have an office. I either do bookkeeping for clients remotely at home or at their premises. Starting a business without capital
can be done.”

“As your business gets bigger, you won’t have time to handle everything yourself. Do what you do best and assign tasks to reliable professionals. Keep business expenses in a separate bank account. Try not to use your personal account or cash to settle your business expenses. I have a few clients who use business accounts for personal purposes, and it can get quite messy to look after.”

There are a lot of ways to build your brand without costing a bomb, with social media and an easy build-your-own drag-and-drop website, she says.

Also, don’t feel that you’re alone – there are a lot of resources out there for women in business, she says. “LinkedIn is a good platform to brand yourself and connect with professionals around you. Maybe invest in a copywriter. Check out and search for women in business meet-ups in your area.”

“Most of all, be confident, positive and trust that you  can do it.”