Saving money is not always an easy thing to do. It can take planning, discipline and patience. However, with the right mindset and steps, you can save faster and reach your savings target sooner. Consider our top tips!
1. Record your expenses
Recording your expenses is the first step to saving money as it will enable you to determine how much you're spending. Aim to keep track of your expenses for one to three months.
There's a few effective ways that you can record your spending. 1) You can download an app such as Pocketbook to help you record your purchases each day. Some banking apps may also provide spend tracking features. 2) You could write down your daily expenses and categorize them. 3) If most of your transactions are done via credit card or Eftpos, you could access your bank statements to analyse your spending habits.
2. Set savings goal
Having a savings goal can be a great way to keep you motivated. Your goal might be a home deposit, future holiday, education or whatever you choose. Once you have your goal set, you have something to aim towards!
| Moneysmart.gov.au provides a free Savings Goal Calculator. This can help you work out how long it will take to reach your savings goal and steps to take to put your plan into action! |
3. Create savings account
It's a good idea to keep your savings separate from your everyday spending accounts. Savings accounts usually earn more interest than other accounts. They're usually online, and don't have a debit card, so it's not as easy to dip into your money.
Before opening a savings account, you should compare accounts from different Banks so you can find the best one for you. Savings accounts with higher interest rates will help your hard-earned savings grow faster!
Tip: If your bank allows, change your savings account name to your savings goal for motivation!
4. Create budget plan
Everyone should have a budget planner as it will allow you to record your ongoing expenses and find areas to cut back and save money. An effective budget will allow you to compare your income to your expenses to determine if you're over spending.
Make sure to factor in expenses that may not occur every month such as car servicing, registration and electricity bills. Our free budget kit is very easy to use and available in PDF and Excel formats.
5. Factor saving into your budget
Aim to save at least 10% of your income if possible. Create a savings category within your budget. If your expenses are too high and you can't save that much, it might be time to cut back in some areas.
You might have some non-essentials or subscriptions that you could do without. Although it may be hard to save at first, once it's a part of your budget, it will become easier.
6. Review spending often
With your budget and savings plan in place, you want to make sure you stick to them. It's important to review your spending regularly. If you find yourself tapping into your savings, you may be over spending.
You may at times experience unavoidable set backs, if you do... Just focus on getting back on track as soon as possible.
Tip: Check your savings progress monthly. This will help you stick to your savings plans and see how well you're doing. If you feel you can afford to save more, it might be a good time to review your budget.
7. Round up purchases
A growing number of Banks such as ING's Savings Maximiser are offering 'round up' as an optional feature.
This feature works by rounding up your daily transactions to the nearest $1 amount, and sending that 'loose-change' directly to your savings account. For example, if you used your debit card to buy a coffee for $5.20, it would round up the value to an even $6 and send the extra 80 cents to your savings account.
Every little bit counts, right?
8. Make saving automatic
Most banks will offer automated transfers between Bank accounts. This allows you to choose how often and the amount you want to transfer into your savings account. This is a very smart way to save as you won't even have to think about it.
Super Saver Scheme
If you're saving for your first home deposit, then you may also want to consider the First Home Super Saver Scheme.This was introduced by the Australian Government in 2017 and allows you can make voluntary concessional (before-tax) and voluntary non-concessional (after-tax) contributions into your super fund to save for your first home.
With the FHSS scheme you can make voluntary contributions into your super of a maximum of $15,000 per year and up to a total of $50,000 contributions across all years. These funds can then be used towards your deposit when needed.
Free budget planner
Save money and keep track of your expenses with our free budget planner. Available in two formats, print-friendly PDF and Excel!
