Not feeling the love for your savings account? Try these simple steps to reignite your savings strategy.
The trouble is, traditional budgeting can be light on the fun factor. That leaves plenty of us in the dark about where our money goes. In fact, close to nine out of ten Australians are clueless about their monthly spending. And the main reason is that it’s just too hard to stay on top of all the numbers.
But without budgeting, growing savings can be just a pipedream. As it is, more than one in four people don’t save anything – or worse, spend more than they earn each pay cycle.
Time for a fresh approach. Take a look at our realistic money saving tips:
1. Put savings on autopilot
If you’re saving for something special like, say, a first home, it pays to make saving – not spending – your top priority.
An easy way to be sure your savings don’t miss a beat is by setting up an automatic transfer from your everyday account to a savings account each pay day.
Select a realistic amount so you won’t be left scratching for cash halfway through the pay cycle. The money left in your everyday account is yours to spend as you please. Just don’t dip into your savings.
2. Try the 50:30:20 method
This one’s easy. Divide your take-home pay into three set portions. Like maybe 50% for living costs, 30% for fun stuff like dining out, and the remaining 20% goes straight to savings.
These numbers aren’t set in stone. Play around with the percentages. See what works for you. Think about setting up separate accounts and dividing your money between them. It can make it easier to stick with your chosen spending portions.
3. Say ‘hello’ to budgeting apps – and goodbye to spending apps
There’s a whole bunch of apps to help you stay on track with spending and saving. A few worth a look include Mvelopes, which let you allocate set amounts to regular expenses. Also, checkout Pocketmoney, which syncs with your bank accounts and credit cards and loans.
If a digital approach to money management works for you, these apps can be the key to growing savings.
On the flipside, plenty of apps encourage us to spend more. From buy-now-pay-later apps to food delivery services, the common thread is that they make it harder to stay faithful to a budget.
Skip the app trap by deleting spending apps from your phone – at least until you’ve started to tick off some savings goals.
Extra Savings Idea: What about unexpected income or gifts?
Sometimes you may get a bit of unexpected money. Or even a lot, if you’re lucky.
A common reaction to getting “surprise cash” like a gift, inheritance, prize or a bigger tax refund, is to spend it fast. Ken Thomas, General Manager at Etax, has seen this countless times, and he suggests,
If you receive money you didn’t expect, just take a breather for a while. After a week or two, you’re more likely to do something with the money that you’ll be happy about – and you won’t regret.
“In that time, you might think of something important, or something awesome, that you didn’t even think about at first. And when you get over the excitement, it’s a lot easier to do something strategic for yourself, like, pay off debts.
We all get excited about receiving money, but the real excitement should come when you pay off bad debts like credit cards, or leap ahead with your house down-payment. That’s when you’re really starting to get ahead.”
Remember, Etax is here to help you maximise your tax refund. The extra money could be the kick-starter you need to get you savings moving. Your Etax tax agent will help you get the biggest refund possible.