Editorial Team

Editorial Team

The 3 Pillars of Success in Personal Financial Management

Everyone, whether they like it or not, is in a highly dynamic relationship with money. Our needs and attitudes change, gradually or all at once. Yet, the advice we get tends to ignore this, varying in its focus from the hyper specific to the broadest generalisations (which often bring more confusion than clarity).

At Unifimoney, we think about managing money in three distinct categories — each requires a different approach and only when all three are done well can you legitimately claim to be effectively managing your money. It’s a handy heuristic to bring structure to what is a big, and often complex and confusing problem.

The 3 Pillars:

  1. Everyday Money Management — Saving, Spending and Investing
  2. Ad-Hoc Needs
  3. Specialist Advice

1. Everyday Money Management — Saving, Spending and Investing

There’s a phrase “if you look after the pennies, the pounds will look after themselves,” which says that if someone takes care not to waste small amounts of money, they will accumulate capital. Though not technically true in all cases, it’s certainly directionally correct.

Saving, spending and investing are very different parts of everyday money and require different strategies — however, managing them properly requires them to be managed in concert. You should ideally be saving and investing as often as you are spending — but that is very hard to achieve in practice and without help.

Spending is easy — it’s a necessity and can give immediate satisfaction. The cup of coffee, the groceries, the tank of gas. But saving and investing take time and effort, and you may not feel the benefit for decades. That delayed gratification makes it hard to stay motivated.

Saving small amounts of money is easy to do on a one-off basis, but it’s difficult to maintain. And it also matters what you do with the money saved. Put it in a jar and inflation will eat away at it over time. Because of the low interest rates from Big Banks where the majority of consumers’ money is held, even the money in bank accounts progressively loses value.

The alternative is to take these small savings (e.g. from transaction rounding, cashback, deposit interest) and invest them into the Stock Market. The Stock Market has returned on average 10% per year vs the average top ten bank account delivering little more than 0.01–0.02%. But investing in the Stock Market has its own risks.

Buy the wrong stocks and you may lose all or part of your money. Buy at the wrong time and again you lose all or part of your money. Spend a lot on fees and the value of your investments will be severely curtailed over time.

To manage the timing risk, an investment strategy called dollar-cost averaging was created. By drip feeding into the stock market, you avoid the highs and lows; instead, your consistent small investments means you’re entering at the equivalent of the average market. Your returns are lower than if you were to invest at the lows and sell at the highs, but the risk of doing the opposite is also significantly reduced.

To avoid the pitfalls of stock selection and pricing, buy a highly diversified and low cost fund or ETF.

A strategy like the above can deliver extraordinary gains over the long term. If you start age 26 with a model $3.50 a day, you could have a total portfolio of over $500K by the time you retire with almost no risk.

You can see how much you could save here.

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Automating everyday money management is what Unifimoney does for its users. By integrating traditionally separate products on a single app, it allows the automation of those difficult or tiresome manual tasks that keep most people from building wealth. Unifimoney helps maximise passive income and the creation and protection of long-term wealth — effortlessly.

This is not to say active investing is bad; far from it. Active investing is a great compliment to the more stable ways to invest, like passive investing and 401Ks. But active investing is not for everyone. However, we believe everyone should try to regularly invest some amount of money into a diversified, low- cost fund and we believe they should start as early as possible.

2. Ad-Hoc Needs

There are certain things that we only do a few times in our lives and often years or decades apart, but that have a massive impact on your finances — buying a house, buying a car, buying insurance, refinancing student debt etc. With the stakes so high and the level of familiarity with such products low (given the fact that we don’t do them very often), such decisions require a large amount of research and effort to ensure the right decisions are made.

3. Specialist Advice

For most people in the mass/mass affluent space pillars, 1+2 may be all they need almost all their life. For those High Net Worth Individuals — the 1%ers — specialist advice is often needed for tax, investment and legal advice and the setting up of trust funds to manage, protect and pass on their wealth. At the other end of the scale, those in financial distress often also require specialist advice to assist in budgeting, tax management, debt management etc.


Managing money optimally can take up a lot of time and energy for seemingly limited results if looked at in the short term.

But wealth management is as much about managing probabilities. While it’s nice to dream about winning the lottery, it’s not something you would bank on. And while you may have a long and successful career without any unexpected hiccups, you also might not. So, wealth management means planning diligently for the future you want and also the one where the unexpected happens — the unexpected seems to happen more often than not.

In such cases, being financially resilient means we can fall and have the time and opportunity to pick ourselves up again. It’s what allows us to eventually have enough to follow your dreams: sail around the world, start a business, send your kids to college, or care for your parents.

But financial resilience isn’t achieved in minutes or days; it takes months and years. Wealth is built on the aggregate and compounding of small amounts saved and invested, big decisions made well, and specialist advice leaned upon when it’s needed. The key is to create the highest probability of achieving financial resilience as quickly as possible. With Unifimoney, we’ve created an account to help you do just that.

*Important information and disclaimers

The above does NOT constitute an offer, solicitation of an offer, nor advice to buy or sell specific securities. The opinions listed above are not the opinions of Unifimoney Inc. or Unifimoney RIA, Inc. but represent the opinions of independent contributors. These contributors may or may not hold positions in the stocks discussed. Investors should always independently research any stocks listed and form their own opinions, while recognizing that any investments made may lose value, are not bank guaranteed and are not FDIC insured.