At the end of the month, do you find yourself wondering where all the money went? It doesn’t have to be this way.
There are three ways to increase your savings: earn more, spend less, and make sure you’re getting the best interest rate. These 7 tips can help you get on your way to saving success.
1. Start with a budget
When you take the time to list out your monthly expenses, you will likely find opportunities for quick win savings. To make it easy (and check you haven’t forgotten something – like car registration or the water bill), download a budget tool online.
2. Keep track of the cash
If you make a lot of ATM withdrawals each month and can't work out where all those small amounts of cash go, you can keep tabs on it all with an app like TrackMySpend. This free app, developed by the Australian Securities and Investments Commission, lets you flag an expense as a ‘need’ or ‘want’ – which helps you re-think that purchase (see tip #6).
A tracking app makes you more conscious of what you’re spending – think of it as the financial equivalent of keeping a food diary. You can also share it with your partner so you’re accountable to each other for staying on track with the household budget.
3. Separate your rainy day fund from your savings goal
As a rule of thumb, you should have at least three to six months take home pay put away in an emergency fund. If you’re not there yet, work out how much you should be setting aside each month to get there – and stick to it. If you also want to go on holiday each year, set an annual budget and divide it by 12, so you know how much you need to set aside each month. If you find yourself about to dip into one of your planned savings, go back to tip #1 and look for more avenues to save that bit extra.
The most important thing is to ensure the funds go into your savings plan as soon as your paid. Set up a direct debit for the day after your pay goes into your account.
4. Could you earn more?
Increasing your income is a lot more fun than cutting back your costs – keep your eye out for new job opportunities, and remember, your own workplace may be the best place to look. Also seek ways to boost the skills your good at, so when those opportunities arise you have maximised your chance of landing a coveted job. You can also find some extra sources of revenue by thinking outside the box. Look at car share sites like Car Next Door, sub-let a room on AirBnB, or clear out the garage and cupboards and sell anything worthwhile on eBay.
5. Look for lazy savings
Still paying for a gym membership or home phone line you never use, or have a mobile phone plan or utility payments you haven't reviewed for some years? You may find there are cheaper options available. Also, do you forget to pay bills and end up with late fees? Get organised, compare plans, and you’ll easily top up your savings.
6. Be mindful about your spending
Every year, we spend billions of dollars on food we throw away, clothes, we don’t wear and services (like that gym membership) we don’t use. If you think intentionally each time you consider a spending decision, and look for value (rather than a bargain) you’ll find it easier to save.
7. Make your cash work harder
In a low interest economy, making sure you’re getting the best interest rate on your high interest savings account or term deposit is more important than ever. Letting your interest income compound will also help you reach your goals sooner – and make sure that hard-earned savings aren't eaten up by extra fees.
If your a good saver and meet minimum requirements, perhaps its time to look at other forms of income earning investments, like corporate bonds. If you are in a position to seek new opportunities you can significantly increase the interest and income you earn on your money. But always remember the rule of thumb, higher returns typically involve moving up the risk scale. Watch this 4 minute video to learn more.
Once you take control of your budget, you’ll be more confident you can manage any unexpected expenses without going into debt. Plus, you’ll be surprised by how easy it is to boost your savings – and reach your goals sooner.
For more information or to apply for a Citi Online Saver account with a competitive interest rate today, click the link below.
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This information is not advice and has been prepared without taking account of the objectives, situations or needs of any particular individuals. Any individual should consider if the information is appropriate for your own situation. Individuals are advised to obtain independent legal, financial, foreign exchange and taxation advice prior to making financial decision. Past performance is not indicative of future performance. Citigroup Pty Limited ABN 88 004 325 080, AFSL and Australian credit licence 238098.