Principles for financial success

Who is this guide for?

Being on top of your finances is an important part of reaching your financial and other personal and professional goals. It can also help reduce stress and anxiety, improve relationships and allow you to focus on what’s important to you. 

This guide is for you if you want to put some simple money management strategies in place that will set you up to succeed financially.  

How do I use this guide?

This guide is designed to be read from top to bottom. Some sections contain a short video that provides an overview of the topic. Some also have activities to help you get your money sorted, with optional activities for those that really want to get ahead. If you have limited time now, we suggest reading each section and watching the videos, and perhaps completing activities later. If you have more time, and are motivated to get on top of your finances, you might read one section at a time, completing relevant activities as you go.  

How long will it take?

We estimate it will take around 50-60 minutes to read the guide and watch the videos. Expect to take longer if you want to do some or all of the activities along the way. 

Goals & budgeting

For simple tips and tricks to get your budget back on track, watch this budgeting and goal setting video from our Principles of Financial Success series.

Setting financial goals and doing a budget go hand in hand. Your budget shows you how much you can save towards your goals. Or, if you have a goal you want to reach faster, you can review your budget to look for expenses you could reduce in order to achieve it.

It’s about working out what’s most important to you and having a plan to achieve it. Be realistic, you want to set yourself up for success.

If your circumstances have changed or you don’t seem to be achieving what you set out to accomplish, it might be time to review your budget. Using a tool like our budget calculator or a free budgeting app, can make the task easier. Don’t forget to include less frequent expenses like utility bills or car registration and insurance. 

Review your budget regularly to ensure you are still on track.

You’re far more likely to achieve your goals if you write them down and cost them out. Think about what you want to achieve financially over the next:

  • 1-2 years (short term).
  • 3-6 years (medium term).
  • 7+ years (long term).

Tip: If you don’t already have an emergency fund, a good short-term goal might be to open an online savings account and build a buffer of 3-6 months’ worth of expenses, to act as a safety net for when life doesn’t go according to plan.


  • Download the Excel version of the budget calculator to your own device and complete a budget based on your current income and expenses. 
  • Set yourself a short, medium, and long-term financial goal. Write them down as a savings plan to help keep you focused.
  • Use Moneysmart’s savings goals calculator to work out how long it will take to reach each goal. Make sure the required monthly savings are within your budget. Monthly savings x 12 ÷ 26 = fortnightly savings.

The following table is an example of what your savings plan might look like.

Goal Amount Timeframe Fortnightly savings
Emergency fund $5,000 1 year $191
Replace car $20,000 5 years $150
Property deposit $120,000 7 years, 11 months $458
Total Fortnightly savings to reach current goals $800

* To be reaseessed once car goal achieved.

Savings & emergency funds

If you’re serious about saving, this short video will explain how easy it can be to develop good savings habits.

Use separate account for spending and savings

Managing your money will be easier if you open separate bank accounts for bills, spending and savings and have your pay automatically split into each account.

Choosing accounts

A comparison website can help you find suitable everyday transaction and saving accounts. Look for accounts that have the features you want, like the ability to set up direct debits and credits, without charging account fees.

Some accounts will have conditions attached to them, for example, you won’t pay account keeping fees if you deposit a certain amount into the account each month, or you’ll earn a bonus rate of interest if you don’t make any withdrawals. Make sure you can satisfy the conditions before opening the account.

Take advantage of savings accounts offering higher interest rates for an introductory period. You can easily move your money elsewhere when the interest rate reduces. Opening a new account and transferring money to yourself is a simple process with most financial institutions.

If you have a partner, consider whether you want joint accounts or whether you are keeping your finances separate.

Government guarantee on deposits

Sometimes people hesitate to take advantage of better interest rates or accounts with better features because the accounts are with financial institutions they are not familiar with. If the financial institution is an authorised deposit-taking institution (ADI), the government will guarantee your savings. Here’s how it works.

Under a scheme known as the Financial Claims Scheme (FCS), the Australian Government protects deposits held by individuals with a bank, building society or credit union, known as ADIs, in Australia. The Government guarantees deposits up to $250,000 per person, per ADI, in the unlikely event that one of these institutions fails.

You can find a list of ADIs on the Australian Prudential Regulatory Authority (APRA) website.

Emergency fund

It’s a good idea to keep at least 3-6 months’ worth of expenses aside in case of emergencies. Life is full of unexpected surprises, some of them will cost money. For example when your fridge or washing machine suddenly packs it in, or your car needs a major repair.

Having money you can access quickly will stop you from having to access credit, which can be costly in the long run, or stretch an already tight budget.

Keep these funds separate from other savings or spending accounts. If you have a mortgage that has a redraw facility, you could keep emergency funds in your mortgage account to reduce the interest you pay. Similarly, a mortgage offset account allows you to keep funds in a separate account while still reducing the amount of interest charged on your mortgage.

Use a comparison website to identify suitable savings and transaction accounts. Type ‘compare bank accounts’ or ‘compare savings accounts’ into your internet search engine and look at a couple of comparison websites to get a good idea of what’s available in the market.

Optional task

  • Open separate bank accounts for bills, spending and savings.
  • Have your pay split directly into each account.


This short video gives you a brief introduction to investing. From savings accounts to growth assets, like shares and property, learn how investments can play a key role in managing your money.

All investments carry risk, some more than others. Higher potential rewards usually mean higher risks, however, you may need to take on some risk in order to achieve long-term goals.

Investments should match your investment timeframe. Income assets, like cash, are usually better suited to short-term goals. Growth assets, like shares and property, are usually better suited to long-term goals.

Getting ready to invest

Before you invest it’s important to have the basics under control, so that you start from a position of strength and are less likely to get into financial difficulty. You’re ready to invest if you have:

  • Repaid any high-interest debt.
  • Created a buffer in your mortgage against future rate rises or unforeseen circumstances.
  • An emergency fund with 3-6 months’ worth of expenses in easily accessible cash.
  • Your home, contents and personal possessions adequately insured.


When you invest directly in shares, you are buying a small piece of the company you invest in. Creating a diversified share portfolio, by holding shares in different companies, across different industries, and more than one market, allows you to spread your risk. If one company or industry is not performing well, you’ll still have other investments that might be performing better. You’ll need time to research and monitor the companies and industries you invest in.

Another way to invest in shares is through a share fund, such as a managed fund or exchange traded fund (ETF). These types of investments allow you invest in a broad range of companies, without a large up-front investment or the necessary expertise required to choose your own investments.

Shares and ETFs can be bought or sold on a stock exchange such as the ASX. You can do this yourself through an online broker. Most large banks have their own online broking service.

If you need help deciding which shares or share funds to buy, seek advice from an appropriately licensed financial adviser or stock broker.


When you buy a residential investment property you are putting a lot of money into a single asset. If you also own a home, you will have a lot of wealth tied up in a single investment market, residential property. If you go down this path, focus on the investment potential and buy in markets you are familiar with, or have thoroughly researched.

Gearing is where you borrow money to invest. It applies to all investments but it’s more common to borrow money for real estate investments. Negative gearing means that the interest on borrowings and other costs of owning the investment, are more than the income you receive from it. You only get a tax break because you are making a loss, so you will be relying on an increase in value to make a profit in the future.

Australian Real Estate Investment Trusts (A-REITs) and ETFs offer a way to invest in property with much less money up front, and they give you greater diversification.

You’ll find more information in our investing money guide. The free online education resources on the Australian Securities Exchange (ASX) website may also be helpful.

Controlling fees

You can’t control returns but you do have some control over fees. If you’re comparing similar investments, always look at the fees being charged, higher fees can cost you thousands over time.

If you are thinking about investing, read our investing money guide.
Optional task
Develop an investing plan suitable for your goals, timeframe and risk tolerance.

Buying a home to live in

Buying a home can be very exciting, just remember that a property is one of the biggest purchases you are ever likely to make, and it comes with high entry and exit fees, so do your research before you commit.

Consider your and your family’s needs, for example, schools, shops, transport and recreational facilities. Check local council websites for socio-economic data and planned developments, you may not want to buy somewhere they’re planning to put a freeway. Is the area prone to flooding or bushfires, is it under a flight path? These are some of the questions you might want to answer when making such a large investment.

When buying a home to live in, there are a number of grants and subsidies that might be available to you, depending on your circumstances and where you are buying the property. These include:

  • Defence Home Ownership Assistance Scheme (DHOAS) – a scheme to help ADF members own their own home. If you have a period of full-time service greater than 4 years, you may be eligible for assistance through the scheme. The assistance consists of a monthly subsidy paid directly into your qualifying home loan. The longer your service, the higher your potential subsidy. You can also take up to four years of subsidy as an up-front lump sum, providing you have enough service credit, but this may have tax implications, so consider getting tax advice first. A DHOAS loan is only beneficial if the interest rate is competitive. If you can get a cheaper rate on a similar loan elsewhere, you don’t have to use DHOAS. Alternatively, negotiate a better rate with a DHOAS lender.
  • Home purchase assistance scheme (HPAS) – payable only once during a member’s ADF service, this provides a one-off payment to eligible members if they buy a home in their posting location and live in it.
  • Home purchase or sale expenses allowance (HPSEA) – reimbursement to an eligible member of the reasonable costs of selling a home, purchased under HPAS, and purchasing another home they will live in at the next posting location.
  • First home owner grant – is a national scheme, administered and funded by each state and territory, which provides a one-off grant to eligible first home owners.
If you are thinking about buying a home, make a list of ‘must haves’ and ‘nice to haves’ as well as any deal breakers.
Use the Moneysmart mortgage calculator to get an idea of how much you can afford to borrow or how much your repayments will be.


Superannuation is a compulsory retirement savings scheme. It’s a way of putting money away now to live off of later in life. Superannuation may also have tax advantages for you.

Defined benefit superannuation

If you joined the ADF before 1 July 2016, you will be a member of DFRDB or MSBS (Military Super). These are defined benefit super funds, where your retirement benefit is a lifetime indexed pension based on your years of service and final salary/final average salary. You will also get additional contributions back as a lump sum.

You can choose to make additional super contributions, either before or after tax, and you can choose how your contributions are invested.

If you have pre-1 July 2016 service and re-enter the ADF, you should automatically re-join MSBS. You may choose a different fund (e.g., ADF Super), however we suggest you think carefully before doing this and consider getting financial advice before making a decision.

Accumulation superannuation

If you joined the ADF after 30 June 2016, your super will be paid into an accumulation super fund. Your retirement benefit will be a lump sum based on contributions and investment returns accumulated throughout your working life. You can choose the fund your super is paid into. If you do not make a choice, it will be paid into ADF Super.

For accumulation fund members, Defence pays super at a rate of 16.4% of salary and some allowances, well above the legislated minimum requirement.

You can choose how your super is invested.

Why you should care about superannuation

Taking an interest in your super now, can mean a lot more money in your pocket down the track. Keep in mind that you will need your super to generate an income for you when you stop working. The more you accumulate, the more lifestyle choices you will have when you retire, or maybe the earlier you can retire.


For example, a 21-year-old ADF member, with an income of $65,000 pa, employer contributions of 16.4% and a current super balance of $5,000, estimates their super balance at retirement. The graph shows the difference between getting:

  • An average return of 5% pa.
  • An average return of 7% pa.

The result shows that compounding investment returns over the member’s working life could potentially increase their super balance at retirement by more than $330,000.

This does not take into account voluntary contributions or pay rises that would increase the difference.

You can make extra personal contributions to super, either before or after tax. With the benefit of compounding investment returns, small contributions over a long period of time can also grow into a substantial boost to your final super balance.

For more information on military super funds, DFRDB, MSBS (Military Super) or ADF Super, head to


  • Defined benefit members – login to your account at CSC and use the iEstimator to estimate your current retirement benefit.
  • Accumulation fund members – go to your super fund’s website and login to your account to see your current balance and investment option. Use Moneysmart’s superannuation calculator to estimate your super balance at retirement.

Optional tasks

  • Choose an investment option for your super and change your current option if necessary.
  • Decide whether you want to make additional personal contributions and if yes, put the necessary steps into place.
  • Nominate a beneficiary to receive your super in the event of your death (accumulation fund members).

Salary packaging

Salary packaging is a way of structuring your income to buy everyday items such as laptops and vehicles, or make additional contribution to your super, out of your pre-tax salary. Defence has a contractual arrangement with a salary packaging provider so that members have an option to enter into salary sacrifice arrangements.

Some items are more cost effective than others and salary packaging does not suit everyone’s circumstances so compare the costs of purchasing the item through a salary sacrifice arrangement carefully. For example, salary sacrificing a motor vehicle is often only beneficial for high income earners, so consider other options before making a decision. Just because you can salary package something, doesn’t mean you should.

You can find more information on salary packaging by visiting Moneysmart or the ATO.

Debts & credit reports

Managing debt is a critical part of good money management. Here’s a short video to help you keep your debts under control and create a positive credit history.

Sometimes debt is necessary, but it’s important to keep your debts under control.

High-interest debt

If you are able to make additional repayments choose the one with the highest interest rate, such as credit cards or personal loans, and allocate the additional repayments to that debt first. Then allocate additional repayments to the debt with the next highest interest rate and so on until all debts have been repaid.

Taking on debt to buy an asset that is likely to increase in value, like a property, is not necessarily a bad thing, but taking on debt to buy an asset that is likely to decrease in value, like a car, can get you into trouble down the track.

Home loans

If you have a mortgage, use a comparison website to compare your loan with similar loans offered by other lenders. If you find a better rate, call your lender and try to negotiate a better interest rate on your loan. Always look for a loan you can pay off early without penalty.

If you do find yourself in financial difficulty, read our Problems with Debt money guide.

Credit reports and credit scores

One reason to keep on top of your debts is the affect it can have on your credit report and credit rating. Your credit report is a comprehensive record of your credit history. Along with all your personal details, it contains information about the credit products you currently have and the credit accounts you have had, or applied for, in the last 2 years. It also lists any missed or partial payments.

Credit reporting agencies use this information to give you a credit score. Lenders and other credit providers use your credit report and credit score to decide whether to lend you money, how much to lend you, and even what interest rate to charge you. People with a higher credit rating will often be able to negotiate better interest rates.

It’s a good idea to check your credit report and credit score to make sure there are no unauthorised transactions on your file. For example, someone having applied for credit in your name without your knowledge or authorisation.

You can get a copy of your credit report for free, once a year. It’s also free to find out what your credit score is.

Go to Moneysmart’s credit scores and credit reports page and use the links provided to get a copy of your credit report and find out what your credit score is. You can get your credit report and credit score from more than one company if you want to see how they compare.

Insurance for you & your possessions

Life doesn’t always go according to plan. This short video explains how you can protect your assets through insurance to minimise financial losses.

Don’t risk suffering unnecessary losses, protect the things that are most important to you. Insurance is a way of managing risk.

Insurance for your possessions

Make sure your cover for things like your car, home and contents, is up to date and that insured values are current.

Before you renew an insurance policy, shop around to make sure you are still getting value for money. We suggest doing three things:

  • Go to your current insurer’s website and pretend to be a new customer – you may be surprised to find the premium offered is cheaper than your renewal notice.
  • Use a comparison website to see how much you would have to pay for comparable insurance with another insurer.
  • Armed with this information, phone your current insurer and ask them to match the best price you’ve found for the cover you want.

Many insurers offer a discount if you have more than one policy with them. You still need to be satisfied that even with the discount, you are getting value for money.

When comparing policies, take note of what is and isn’t included, insurance cover is not cheap if it doesn’t cover you for what you want covered. See our personal insurance guide money guide for more detailed information.

Make a list of your personal possessions and estimate how much they would cost to replace.

Optional tasks

  • Review your current insurance policies to determine whether you have an appropriate level of cover for anything you could not afford to replace.
  • Call your insurer to update your policy if necessary.

Personal insurance

As an ADF member, you have automatic death and invalidity cover through ADF Cover, MSBS or DFRDB (depending on your membership).

If you decide that you need extra cover you can source it privately. Be aware that most life insurance policies will not cover you for war or war-like activities. For information read our personal insurance guide or visit the CSC website.

Will & power of attorney

This short video explains the importance of having a valid will, and what to consider before granting someone a Power of Attorney.


A will is a legal document that dictates how your assets should be distributed when you die. If you die without a valid will you will be said to have died intestate and your assets will be distributed according to intestacy laws in your state, which may not be in line with your wishes.

For a will to be valid it must meet certain criteria, which is why we recommend seeing a lawyer (ADF LEGALOs can usually help). Never use a will kit.

Store a copy of your will in a safe place (DMFS stores wills of permanent members and some reservists) and tell your executor and next of kin where it is.

Review your will whenever your personal circumstances change, for example, you get married, separated or divorced, or become a parent, and make arrangements to update your will if necessary.

Optional task

If you don’t have a current will, make an appointment with an ADF legal officer to get one written.

Power of attorney

While a will is something that all adults should have, a Power of Attorney (POA) is something that you might want to think twice about.

When you grant someone a POA, you are giving them the power to manage your money on your behalf. That means they can operate your bank accounts, buy or dispose of assets, and make financial decisions as if they were you.

You can limit a POA, for example, you could make it valid for a specific period of time, or only allow transactions up to a certain dollar amount.

There are different types of POA, for example:

  • General – ceases if you lose mental capacity.
  • Enduring – continues to operate after you have lost mental capacity.
  • Medical – allows your appointee to make decisions about your medical treatment if you become mentally or physically incapable of deciding for yourself.

Only grant a POA to someone you completely trust and get appropriate legal advice first.

Protect yourself from scams

Scammers have become very sophisticated over the years so don’t think it will never happen to you, or someone you know.

Investment scams now top the list in terms of money lost, and authorities think his may only be the tip of the iceberg, because many victims are just too embarrassed to come forward and admit that they fell for a scam. In 2019, Aussies reported over 167,000 scams with losses totaling nearly $143 million.

Scammers use a variety of tactics such as phishing, fake bills and investment opportunities. Many have set up websites and created documentation that looks very professional and legitimate.

Scammers have used social media to target victims through fake online stores and the sale of fake event tickets.

A healthy dose of skepticism is probably a good thing when it comes to parting with hard earned cash. For tips on how to avoid scams, go to the ACCC’s Scamwatch website.

Optional task

Spend some time on the Scamwatch website to learn about the different types of scams that are out there and for tips on avoiding scams.

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Here’s a handy checklist summarising the actions suggested to get your finances off to a strong start.



Watch our short videos about the principles for financial success.



Here you’ll find calculators and other resources to help you get your finances sorted.




Head to our Referral Program to find an advisor who is free from remuneration-based conflicts of interest.



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