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& My money

Money 101: Money basics to master

Close up of a person's hands paying for something using a card and EFTPOS machine

What to do with your hard-earned cash can feel overwhelming for those of us that didn’t love Economics at school, but you don’t have to go back in time to learn good money sense.

Money management has some guiding fundamentals that will keep you in good stead once learned. Here are four of the basics to get you started.

What’s compound interest and why should I care?

Compound interest makes money make money, all by itself.

For example, say you have $200 in a savings account which is paying you 1% annually. At the end of that year, your initial deposit will be bolstered by $2 in earned interest, giving you a total of $202.

The next year, the interest will be calculated on $202, which means the interest paid will increase to $2.02 and your balance will now be $204.02. It’s growing, without you doing anything.

Leave that initial $200 there for 20 years and, assuming the interest rate stays the same and you make no contributions, you would end up with $244.04.

Imagine what that figure could look like if you were making monthly deposits to that account?

Making a monthly budget

A budget tracks both the money you’ve got coming in and the money going out, including bills and spending on fun. Knowing where your money is going is very empowering and it gives you the knowledge to make decisions, plan for the future and be in control.

What’s the right breakdown of spending to savings? Plenty of people swear by the old 50/30/20 rule. So, 50% of your budget goes to essentials like rent, utlities and insurance, 30% goes to wants and 20% to savings. It might not work perfectly for you, but it’s a great place to start.

Keep an eye out for an exciting new app we’re working on. It will help you track your comings-and-goings and understand what you are doing with your money.

Know the costs of living

Adulting can bring a bigger world of living costs to your budget, everything from getting out and about to study fees, and even insurance for your car. If you have a budget (see above) you will know what those costs might be. Next, you want to know if they are good value.

Don’t assume you’ve got the best deal on your mobile phone plan, check. There are always several providers out there, and a couple of clicks online can save you money and reduce your cost of living. This applies to other things too - always shop around.

Tracking your bills and making sure you have the money to cover them when they are due also makes for good money sense. You can use your direct debit settings in the P&N Bank mobile app to be notified when a payment is taken out of your account or enable push notifications to ensure you know when payments are due.

Your credit score matters

This brings us to the next money tip – your credit score. Everyone has one, and you can find out for free what yours is.

It’s based on your money behaviour when paying utility bills like phone and electricity, or timely repayments on credit cards or loans. Typically, people only find out what their credit score is when they go to get a loan – a low credit rating will impact your ability to borrow.

You can repair a low rating over time but keeping that credit rating healthy is an extra incentive for paying your bills on time. Your future self will thank you for it!


We're currently developing new banking tools that will change how you bank in the future. Keep an eye out for future announcements, coming soon.

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