But all too often, slip-ups along the way instead drain a fun fund. Here are the 10 biggest.

1. Not designating 'me' money  

Seems a logical place to start! The old money mantra is squirrel away 10 per cent of your salary – and that's a good base amount. Pay your "future" self first, too, via an automatic transfer the moment your salary is credited. Otherwise, I guarantee the money will be gone, probably with nothing to show for it. Instead invest this for the long term. 

2. Having no Holy S--t fund 

This is the quick cash specifically earmarked for stuff going wrong. Because at some point it will. You should have at least three months' income in reserve; six is better. And if you have a mortgage, house this in an attached offset account so it slashes your interest in the meantime. Without a Holy S--t fund, you are dicing with debt…

3. Frittering your future 

Spend now, pay later might be the way of the modern world, but anything you spend now – unfunded – will curtail your ability to spend later. The more you commit to debt repayments the less you'll have left to live – and this can quickly become a downward spiral. Save don't cave, particularly when it comes to astronomically expensive credit cards.

4. Being a bill DIL 

Cleverly setting up direct debits for all your utility and insurance renewals? Stop. These companies routinely hike bills and premiums for existing customers to fund discounts for new ones – and if you succumb to Digitally Induced Laziness (DIL), you probably won't notice. Get SMS reminders instead.

5. Choosing mates over rates 

You might recall a friendly bank manager or be nostalgic for school banking, but sticking with their sub-standard products could cost you a year's salary (or more). Take a $400,000 mortgage – with a big four bank the overall (discounted) interest bill is $269,044; with the best lender, it's $191,138 (4.53 versus 3.35 per cent, according to Mozo).   

6. Letting money languish 

This is about any savings (those you don't want subjected to investment risk). Keep them in the highest interest account you can find … unless you have a mortgage. Like your Holy S--t fund, this money should be in a mortgage offset – you can usually get multiple offset accounts attached to the one loan, if you're worried about mixing up money. The cash rate today is a paltry 1.5 per cent – and you'll pay tax on earning. The "effective" return from the mortgage is your interest rate – and this will be tax-free. It's a no-brainer.  

7. Ignoring insurance 

None of us likes to think about the worst happening, but one of the biggest mistakes is leaving yourself and your family financially exposed to traumatic events – we're talking death, disability or disaster (natural, fire or other). Get properly insured for each. Additionally, income protection insurance is vital – if you think about it, it's your most valuable asset.

8. Coasting for calamity  

Ask yourself: what do I really want for my life? To live overseas? To only work part-time? To drive a Ferrari? Without crystallising a precise purpose, scrimping and saving – well – sucks. Figure out not just where you want your money to get you, but exactly when. You need strong motivation to resist instant gratification … so get it.

9. Falling for hype 

It's so seductive to believe there is an easy way to make a lot of money. There ain't. But there are sure fast ways to lose it. Be cynical about, and even suspicious of, anyone spruiking a great money-making venture, especially if it's complicated. Even a friend confiding a hot share tip.

10. Getting defeatist 

My work with high school students has made me concerned a generation is giving up on securing financial freedom. There is such despair at property prices, in particular, that the attitude is: "I can't succeed so why would I try"? Remember, the younger you start saving, the cheaper and easier it is to get ahead – just $6 a day invested at an 8 per cent return from age 20 becomes $1m by retirement. What's more, not all property "dreams" look the same. 

smh.com.au