Top Tips to Saving
Boost your financial know-how with these simple steps to savings from Nigel Brookson Managing Director of DotComDotAu Search Marketing Australia P/L.
“Savings MUST be treated the same as a bill – It Must be paid. It’s with that discipline that you will actually start to see results, as your savings grow.”
Set yourself a purpose
Setting yourself a purpose or reason to save will make it real and as a result much easier to achieve. Whether you are saving for that dream home, new car, or your next holiday, being able to visualise your purpose will help motivate you into action.
Plan ahead
Before you even set yourself a budget, think about special events you may have ahead. Holidays, weddings, birthdays; they all add up. With these occasions in mind, plan to set money aside for these spending dates.
Budget
Don’t panic, budgeting is easy! Or at least making one is; it’s keeping to it that most people find hardest. Compile a list of your regular expenses then match them against your income. Whatever is left over represents money you can use for your savings. Savings need to be treated as a bill that must be paid. It is also useful to get a book, and keep track of your regular bills, utilities etc. this will help forecasting upcoming expenses each month or quarter.
Set up a high interest account
Open a high interest savings account to make sure you are getting the most out of your savings. Many have two or more accounts, so you can transfer money from your main account into a second account for your savings. Periodic payments are a good idea.
Whether you want a short-term or long-term savings plan, a fixed rate or instant access to your funds, choose an account which best meets your financial goals. For example consider in the:
- Short term (0-2 years), an online savings account if your goal is saving for a new car or your next holiday;
- Medium term (2-5 years), a mix of saving strategies using both a savings and Term Deposit account if you want to save for an extended overseas trip or a mortgage deposit; or
- Long term (5+ years), using a Term Deposit account if you are saving towards a major home renovation or retirement.
Where can I save?
You’d be surprised how much you will save by cutting back on a few daily expenses. For example, bring a homemade lunch to work or skip that mid morning cappuccino. Buying your lunch everyday can cost up to $50 per week, which on average is $200 per month! car pool, or catch the bus; car parking fees alone each month will save you a significant amount.
Spare change
Another excellent way to save without even noticing is to have a jar at home for all the coins you accumulate during the day. Once a month take it to the bank, and deposit that amount into your savings account. You’ll be amazed how it adds up!
Pay off your credit card
If you have more than one credit card consider consolidating your debts to one card and slow down your spending while you work to pay off the outstanding balance. Try to pay extra each month, so you are reducing the interest, not just paying the banks interest.
Pay off your personal loans
If you have more than one personal loan consider a debt consolidation loan which combines all your personal loans, and perhaps credit cards into one manageable personal loan. Try to pay this loan off as fast as you can by making extra payments each month, so you are becoming debt free faster, and will be able to save more money each month; increasing your personal wealth.
Automatic savings transfer
With your budget in place, make sure you automatically transfer via an internet banking periodic payment, a portion of your salary into your savings account each month as soon as you get paid. If you don’t see the cash, you can’t spend it!
Keep track of your budget
It is all very well setting a budget – but you need to make sure you follow your progress across the month to see if you’re sticking to it. Keep hold of receipts so you can check your daily spending and regularly log into your internet banking so you can track your spending.
Savings access
Managing your savings online enables you to review and access your savings when it suits you. It also makes instantly accessing your funds in an emergency less stressful when unexpected costs come up.
How much can you save?
Set yourself a savings goal and project how much you can accumulate over time from an initial contribution and regular ongoing deposits. Treat savings as a bill that must be paid each month.
There are many ways to save money monthly, and for most people it involves knowing how to reduce expences.
