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Implementing MoneySMARTS via Moorr

Sections in this guide

Introduction to MoneySMARTS

MoneySMARTS is a powerful money management system designed to help you save more and gain better control over your finances. 

It goes beyond mere budgeting or banking setups, offering a structured and rules-based solution. The system is user-friendly, time-efficient, and adaptable to various household configurations. It works throughout different life stages, from adolescence to post-retirement.

MoneySMARTS empowers you to plan, organise, and manage your money with certainty and confidence. It fills the gap in financial literacy education and has garnered positive feedback from users. 

In our best selling book, Make Money Simple Again, you’ll learn the fundamentals and components of the system before diving into the 7-step implementation process. This book is free for download! Check it out here.

If you’re already familiar with the 7-Step process, then buckle up and get ready to experience the incredible benefits of implementing MoneySMARTS via Moorr!

The 7-Step MoneySMARTS System

The first step toward building wealth is believing in the goal. You must want to achieve this and believe in your ability to achieve financial discipline and self-control.

Once you’re clear with your motivation, you’ll be ready to embrace this change.

Step 1: Gather

If possible, combine your finances by setting up a joint bank account. This will allow your combined money to work harder for you, improving your overall outcome. If you prefer separate accounts, you can still use the MoneySMARTS system with virtual jars to track your surplus amounts.  

At this stage, gather all your financial documents including payslips, bank statements, and credit card statements. Familiarise yourself on where to look for this information. Is it on an online banking platform? What are your login details? Or is it a paper trail? Do you know where you’ve stored them? Or are they in your email inbox?

By gathering your financial documents, you’ll start to understand your income, savings, assets, and outstanding debts. Identifying your surplus money will be crucial in creating a plan for building wealth.

Checklist for information required to start MoneySMARTS:

  • Bank Statements
  • Credit Card Statements
 

Helpful tips in gathering income:

  • PAYG – If your income is made up of an hourly rate, commissions, allowances etc., gather up about 3-6 months of payslips
  • Self-Employed or Business Owners – Your last 2 tax returns
  • Rental Income – Last couple of rental statements
  • Investment Income – Last couple of years of share dividend records, managed fund statements, or refer to your tax returns
  • Government Income – Child allowance, personal carer statement, etc.
  • A quick scan of recent Bank Account statements may reveal other sources of income
 
Helpful tips in gathering expenses:
  • General Spending – Ideally it’s best to go back and look over your past 6 months of bank and credit card statements to get a clearer picture of ‘where it all goes’
  • Provisioning Spending – Think about the big things you plan to spend your money on over the next year. It could be anything from replacing your couch to spending on gifts. Document what these planned expenses are for the coming year.

How can Moorr Help?: Create your free account, log in, and follow the prompts. You’ll be asked to enter some numbers. Don’t worry if you don’t know it off the top of your head. Just put in a rough figure, and you can update it once you know for certain.

 

Step 2: Sort

Organise your financial documents and sort through the numbers. Record your income, savings, assets, and outstanding debts. Having a clear understanding of your finances is essential in crafting a successful money management plan.

How can Moorr Help?: Now that you have the financial documents, update each section in Moorr, particularly the income, assets, and borrowings sections. We’ll work on the expenses next.

 

Step 3: Determine Your Financial Picture – Calculate

Break down your spending into essential living expenses and discretionary items. Identify and calculate your surplus money, which will be crucial in building your own lifestyle by design. Knowing how much you can allocate to your financial goals is the key to success.

How can Moorr Help?: Let’s track your spending! 

  1. Get a copy of your bank statement for the last 12 months and get your calculator ready!
  2. Once you’ve got your bank statement, start categorising. You can find all the common bill and spending expenses on Moorr. Start there!
  3. If you’re wondering how to categorise from a statement, it might be best to have it in an Excel spreadsheet first, and then transfer it to Moorr. Break your spending into:
    • Regular spending – Ideally it’s best to go back and look over bank statements and credit card statements from the past 12 months to get a clear picture of where all your money goes. (Getting your numbers as accurate as you can might take a bit of effort now, but you will be glad when you’ve done it, because it will mean a lot less work when you have MoneySMARTS up and running.) Note the monthly average in your Excel sheet. We’ll transfer it to Moorr soon.
    • Provisioning spending – Think about the big things you plan to spend your money on over the next year. Some of you could be planning on replacing your couch. Others could be spending big on gifts. You need to document what these planned expenses are for the coming year.
  4. Go to the MyFinancials section in Moorr and enter what you have recorded as Expenses Cards.
  5. Next, go to the MoneySMARTS Dashboard and enter the provisions.

Once you’ve completed all this, check out your Dashboard on Moorr!

This is the coolest part because it tells you how much surplus you have and more. It’s like a profit and loss statement. If the dashboard shows that you should have a surplus in place, but you don’t, it means you may have overestimated your income or underestimated your expenses/repayments. Make sure to check and update accordingly.

And here’s a heads up. The dashboard can means different things depending on your unique financial circumstances. 

For some, it could look amazing and this means you just need to continue doing what you’re doing and make sure you don’t deviate from this path. For others, this could be a cold harsh reality check but please don’t let it get you down. Use it as a source of motivation to change and to do better. 

Financial freedom is a journey and just because you are in a tight spot now, it does not mean you’re at a disadvantage. The journey to wealth-building is ongoing, and you’ve got plenty of opportunities for renewal and improvement. As we mentioned earlier,

“The first step toward building wealth is believing in the goal. You must want to achieve this and believe in your ability to achieve financial discipline and self-control. “

 

Step 4: Set Up the System – Banking

To run MoneySMARTS successfully, you will need to ensure you have the banking set up properly.

If you own the book – refer to the extensive instructions in Chapter 3, pages 30-46 and Chapter 5, pages 94-101.

If you have a mortgage, set up your Primary Bank Account and Living & Lifestyle Bank Account as 100% offset accounts on your owner occupier property. And manage your credit card wisely.

If you don’t have a mortgage, make sure you’ve got a high interest bank account and are trapping all your surplus there.

And this is the time to optimise your spending! Use the MoneySMARTS virtual flour jar categories to calculate your income and expenditure. Identify discretionary spending and areas where you can cut back to increase your surplus income.

Once you’ve done that, categorise your regular spending, credit card expenses, direct payments, loans, and planned provisions spending. Analyse each category to determine where you can save more and increase your trapped surplus money. Here are some examples: 

  • Living and Lifestyle Expenses: Try and identify non-essential expense items in this category. By cutting back on these, you could save extra per week, which could be used towards your goal.
  • Credit Card Expenses: Keep your bill spending down and shop for better deals! A common one is negotiating phone bills to get better deals with your telco provider.
  • Bank Fees and Accounts:
    • If you have a mortgage: Though your bank fees might seem higher, professional packages often include valuable benefits. Shop around using a Mortgage Broker and consider various factors such as interest rates, borrowing power, credit policy, and more.
    • If you don’t have a mortgage: Look for a high-interest, no-fee account. If interest paid isn’t high enough, try shopping around for a better deal. Ideally, only have one credit card so you can save on fees.
  • Planned Provisions Spending: If you have some flexibility in planned provisions spending, target specific areas especially for holiday and gift items. Make sure your spending is really optimised in these provisions.  
  • Primary Account: You have a money surplus, and the trapped surplus money will continue to build up in your 100% offset Primary Account, reducing interest costs. Consider paying down debt more aggressively if you want to tighten your budget further but make sure not to stretch yourself too thin.  
  • Banking:
    • If you have a mortgage: Convert all accounts into 100% offset accounts linked to your home mortgage. If it’s not possible to convert some to offsets, consider transferring the money out and closing those accounts. Your Living & Lifestyle Account can be set up as an additional offset account, and you can apply for two debit cards linked to this account. Decide which credit card will be your active card, and keep the second one only for emergencies without fees if you pay it off every month.
    • If you don’t have a mortgage: Choose a high-interest savings account as your Primary Bank Account and arrange for your salary and direct payments to flow into this account. Create a separate Living & Lifestyle Bank Account for weekly allowances. Make sure your weekly allowance is transferring each week into your Living & Lifestyle account – so you have your 7-day float up and running. Be strict with your credit card and ideally only keep one.

How can Moorr Help?: Check out our default recommendations!

Prepare to be amazed as you journey through Steps 1 to 3! You’ll gain a deep understanding of your money habits and develop a newfound awareness of your finances – truly fascinating, isn’t it? We’ve emphasised the importance of having the right mindset from the start, and now, as you check out your Moorr Dashboard, you’ll witness your household’s money flow in and out with clarity. This crucial insight will guide you in setting up your banking structure effectively.

Drawing on our extensive experience in money management and insights from our diverse user base, we’ve tailored bank account structure recommendations for different bill and spending categories. Keep in mind that these recommendations are general guidelines based on the core principles of MoneySMARTS, and they might need some adjustments to align with your unique spending habits. Feel free to make tweaks as you see fit.

Once you’ve reorganised your banking structure, make sure to update your progress in Moorr. This way, you’ll be all set to unleash the full power of MoneySMARTS and start managing your money like a pro!

 

Step 5: Take Action – Check Up

Monthly check-ups allow you to track and understand your money and cashflow position in a shorter timeframe to give you clearer insights into how well you are progressing and controlling your money. 

In short, you are assessing the cashflow for the month – money in and money out – and tracking it against your yearly targets. 

For book owners jump to Chapter 6, pages 107-125.

How can Moorr Help?: Monthly Checkup!

This check-up should take less than 10 minutes a month! To see the full reporting and insights, you only need to input three figures in Moorr:

  1. Primary Bank account balance
  2. Credit Card account balance
  3. Your total provision spending for the month. (Tip: You can add this On-The-Go via the app! That way, you don’t have to note it down and best yet, you can see how much provision is left before making that next purchase.)
 

Step 6: Adapt and Improve – Tweak

As you embark on your financial journey, remember that flexibility is key. Be open to adjustments and improvements that will help you reach your goals faster. Increase your surplus money by reducing discretionary spending and stay grounded in reality while working towards your goals. You can refer to Step 4 on some suggestions on how to optimise your spending.

Tweaking is all about fine tuning your numbers throughout the course of the yearly program. If a bills item has gone up and will remain up, tweak it to reflect the ongoing costs.

Soon enough, you’ll be a seasoned MoneySMARTS user, and your money will be on autopilot, saving surplus and preventing unconscious overspending. Keep at it, and financial freedom will be yours to enjoy!

For book owners refer to Chapter 6, pages 127-129.

How can Moorr Help?: The best way to do this is to get a trendline of your spending

If you noticed any of these scenarios:

  • You’re constantly running out of money in your 7-day float
  • You have a lot left in your 7-day float
  • You’re spending on something that is not provisioned for
  • You’ve got plenty of provisions left
  • When you’re doing your Monthly Check Up, you notice you’re saving less than the targeted surplus

Review and ask yourself if you can optimise this and get more accurate with your spending and updating Moorr. Stay grounded in reality, but never lose sight of the ultimate goal— living your lifestyle by design. Moorr is here to support you every step of the way, providing the tools and resources you need to succeed.

 

Step 7: Reflect and Renew – Rollover

Rollover is all about planning for the next 12 months of money in and money out. This annual review is very important to ensure you think about what you are going to need for money on a regular basis and also on an ad-hoc basis.

The rollover function is about reviewing your overall performance and resetting some of your numbers and most importantly the surplus you are planning to trap for this period!

For book owners go to Chapter 6, pages 132-134.

How can Moorr Help?: Annual Rollover

We’ve made it super easy for you to do an Annual Rollover on Moorr! Simply head to the rollover section on the MoneySMARTS page and follow the prompts. 

And don’t miss out on all the amazing insights you can get on your dashboard! Here are some suggestions to give you a better insight on what you’ve achieved so far and what you can do in the next 12 months:

  • MoneySMARTS Dashboard: Did you hit your target? What did you spend on most? Check out the Check Up reporting table right at the bottom of the page too.
  • Wealth Dashboard: Has your speed increased?
  • MoneyFIT: How are you doing compared to your peers? If you’re looking for some inspiration on how others similar to you doing, this tool is for you.

Free Download

MoneySMARTS is an in-house built money management system. It’s a rules based system and all about making use of smart banking structures to ensure you don’t unconsciously overspend. 

The principle is simple, but implementation can be complicated depending on your unique situation. That is why we’ve written a whole book about it! (And it became a best seller too 😎)

So if you are keen to find out how MoneySMARTS can work in your own household, choose an “adventure” that fits you best below, and the free book will land in your inbox within the next 5 minutes.

 

Download Here

Conclusion

Once you’ve got a system in place to trap more surplus, what should you do next?

Well, that’s really up to you! Invest it, save it, or use it to pay down non-productive debt. 

Whatever it is, rest assured that you now have the freedom to choose!

Try Moorr For Free Today

Spend money on the things you want without guilt and save for the future with confidence. You can have the best of both worlds. Achieve more, with Moorr

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