The twin bottleneck of stagnant pay growth and growing living expenses, particularly housing, has made it harder than ever for many Australians to save money.
For many of us, saving might at best appear like a distant dream. However, 51.3 percent of respondents pay credit card payments on time each month, according to Savvy’s 2020 Financial Literacy Survey. Applications like the Budget Direct Money Manager App track an additional 41,75% of respondents’ costs.
Here are few things you can do to increase your chances of saving money successfully. Not only for short-term goals, such as a vacation, but also for long-term goals, such as saving for a down payment on a house:
#1. Make A Budget
A budget is at the heart of every savings strategy. Budgeting allows you to prioritize your purchases and strike a balance between spending and saving over the course of a year.
According to MoneySmart, you may work out all of your monthly costs, such as rent or house loan, transportation, insurance, and energy, by reviewing your credit card statements, bills, bank statements, and receipts.
#2. Track Your Spending
According to MoneySmart, we might get into the pit of thinking that expenses for large stuff are what makes us feel in difficulty while it’s frequently the small stuff that costs us more.
Therefore, keeping track of your daily expenditure is vital so that you don’t live over your means. Your bank statement will inform you how much money and how much money goes into your bank account. Then you may compare it to your budget to determine if you keep to it or not. You will then be able to identify places to preserve.
#3. Pay Off Your Credit Card
With credit card interest rates as high as 25% or more in Australia, it’s easy to understand how reckless credit card use may derail even the most modest savings objectives.
The easiest method to prevent interest and late penalties is to pay your credit card in full and on time.
MoneySmart suggests setting up a direct debit payment to prevent missing payments. You should also pay more than the bare minimum, or you will wind up paying a lot more in interest. If you can’t be trusted with a credit card, Canstar suggests following your grandparents’ lead and saying, “No credit, no EFTPOS.” Simply take out the money you’ll need for the week and stretch it.”
#4. Open a savings account
Savings accounts may provide you a better interest rate than a standard transaction account by limiting your access to your money.
Somewhere you can save money – the amount left after paying for personal requirements and taxes – and any windfall – you may add a part or all of your discretions (e.g. tax refund). By automatically making periodic transfers from your main account (transaction account) to your saved account, you will be tempted to spend this discretion.
#5. Focus On Recurring Expenses
According to the experts at The Thrifty Issue, while every little amount helps, it’s your major, recurrent costs that give the most fruitful ground for increasing your savings.
Look through your bank statements and see what you’ve spent money on over the last year.
Then check how much money you can save on them by refinancing your mortgage, comparing insurance providers, and other services, for example.
If you spend a day going over everything, you can save thousands of dollars.
You only start saving when you develop healthy money habits, and when you make saving money a priority for your future requirements more important than your current needs are. So do that! So do it! The life-cycle paycheck may be stopped by a simple secret: Make a zero budget before the beginning of the month.