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Mybudget
Melbourne Cup hot tip: how to gallop ahead
By Tammy Barton


MyBudget Gallop AheadPeople all across the country will bet on the Melbourne Cup today, many of them hoping to win big. When the Melbourne Cup is over, a lot of them will go back to playing lotto and the pokies to keep their hopes alive.

Of course, there’s nothing wrong with throwing a few dollars into a sweepstake or seeing how long $5 will last in a poker machine. If you’re gambling for fun, you understand the odds and you can afford it, why not have a bit of fun.

But I think a lot of people gamble because they don’t understand that when it comes to money management there’s a guaranteed way to get ahead. It’s the rule of SPENDING LESS. It’s easy to understand and it’s the surest bet of all.

Let’s say you make the following adjustments to your weekly budget: You reduce your supermarket bill by $10, your phone bill by $5, and your going-out expenses by $20. You also start taking your lunch to work and spend $200 less this year on fashion, car modifications, electronics or whatever else your vice is. In 12 months, you’ll save about $2,300.

Now let’s say you put that money into a term deposit account earning six per cent per annum. After 12 months you’ll earn $138. Hmph! That’s not nearly as exciting as placing a trifecta bet on the Melbourne Cup. Or is it?

Consider this... If we assume that you don’t make any withdrawals and that every year you continue to deposit another $2,300 into the account at an interest rate of six per cent, within five years you’ll have $13,000. Within 10 years, you’ll have $30,000. And all you’ve done is trim a few expenses.

So my hot tip for this week is this: Put your money on “spending less.”

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