The good news is that the average Australian will earn over $2 million in their lifetime. The not-so-good news is that many people won’t take full advantage of this opportunity.

If you are having trouble getting ahead financially, a budget is a simple but highly effective tool that can help you make the most of your hard earned cash and can help you reach your financial goals.

By having a sound budget in place, that holiday you’ve been dreaming about, but could never afford, may only be months away. Start by setting smaller goals and work your way up from there.

A budget should include all your expenses and total income each month, so that you can understand your current situation. You can then put a plan in place to reduce debts (like credit cards or mortgages) or for regular savings. Even a little money can make a big difference. For example, if you were to save $1 a day from age 18 until age 65, you would have $1 million by age 65.

Try these money saving tips
Arrange for an automatic deduction from your pay into a dedicated savings account - you’ll be surprised how quickly it builds up.
• Have you considered consolidating your debts? If you have a number of debts, such as several credit cards, you could apply for a personal loan to pay them off, and service one loan possibly at a lower interest rate.
• Once you’ve established a budget for clothing and entertainment, stick to it! Give up this week’s luxury item to pay for next week’s treat. Don’t just hope you’ll be able to make up for your overspending at a later date. If you’re tempted by an impulse purchase, think about your goals. Spending the money on a luxury item will put your plan to go on a holiday or buy a new stereo just that little bit further out of reach.
• Before making a credit card purchase, make sure you’ll be able to pay it off at the end of the month. If not, consider lay-by to avoid paying interest. If you’re an impulse buyer, leave your credit cards at home.
• Remember that small purchases add up. For example, spending $5 on lunch each workday for 12 months adds up to almost $1,300.
• Stick to your shopping list and don’t go to the supermarket hungry. Impulse buying wastes money.
• Pay your high-interest debts off as quickly as possible. By making extra repayments from your credit card will save you money in interest.