According to MoneySmart, 43 per cent of Australians don’t save at all. This is a position that most of us have been in – one that’s all about short term gratification at the expense of long term goals and achievements.
Why don’t these Australians save their pennies? Perhaps it’s because they’re being unrealistic with their goals, or maybe it’s because spending all your money can be a whole lot of fun. Either way it’s not ideal, so we’ve whipped up a list of five tips that will actually make saving money easier.
Put these to use and you could be riding around in a brand new car, or servicing your first home loan earlier than you might have expected.
Review your spending
Take the time to look closely at your spending. Split all expenditures into categories (such as entertainment, groceries, rent, utilities) and work out how much you spend on each. You’ll probably identify a category that you’re spending far too much on, and with this information you can take steps to remedy that.
For example, MoneySmart data says that on average Australians spend $32 on dining in restaurants every week. If you identified this expenditure and were saving for a holiday or a home deposit, it would be easy to quickly fix the problem and get your saving back on track.
Consolidate your debts
The Australian Securities and Investment Commissions’ credit card clock shows that Australians hold over $32 billion worth of credit card debt. That’s over $4,000 per person! Info Choice put the average credit card interest rate at about 17 per cent – that means the average Aussie could be paying almost $700 in interest on their credit card debt interest per year.
Consolidating debts like these into a lower interest loan such as your home loan will make paying them off far easier. If you’ve got a mortgage, talk to us for help making this happen.
One lofty savings goal, such as a deposit for a home, might seem too far off to motivate you to save.
Instead of aiming at something in the distance, Westpac’s saving guide recommends setting smaller, more imminent, goals.
This could be as simple as aiming to put aside a certain amount every pay day, and working out how long it will take you to reach your goal at that rate.
Don’t be unrealistic
What does putting away 75 per cent of your pay, subsisting on $1 instant noodles and never going out with friends have in common? They’re all unrealistic saving goals that will almost certainly result in you giving up on your savings plan and forgetting your goal.
Make sure your goals are realistic and make small changes to your lifestyle over time rather than drastic ones. That way you won’t risk burnout – instead you’ll be able to slowly transform the way you spend money until you’re a bona fide money-saving-machine.
Work towards something
The light at the end of your savings tunnel needs to be a bright one. If you don’t really want to achieve your goal, then buying something that you want now (a cold beer, new shoes, a nice dinner), will always come before eventually buying what you want in the future (a holiday, a home, a car).
If you need a little help consolidating your debt to get your savings on track, reach out to us to for some assistance. On the other hand, if your savings are going well, then let’s work together and start making your dreams of home ownership come true.