Effective money saving strategies
Key take away from this blog (2 min read)
- Why your budget isn’t working
- Understanding your spending
- The 20% rule – paying yourself first
If you enjoy spending precious time with loved ones, eating a hot pie at the footy and sharing a few drinks with friends around the BBQ then let me tell you a little secret… the last thing you want to be doing is spending your precious time in front of an excel sheet.
When it comes to creating and sticking to a budget, there are some simple steps you can take today to start saving more effectively with minimal effort.
Realistically, not everyone enjoys spending their time tracking their budget on spreadsheets, going through bank transactions or calculating spending on a daily or weekly basis. Let’s start taking some actions that will get you moving forward and increase the balance of your bank account.
First thing, pay for yourself first! That means when your salary hits the bank account, it goes straight into an account that is earning you interest. As a rule, 20% of your income should be going into your savings as a minimum. If you cannot save 20% then there may be a problem.
Secondly, categorise your spending into needs and wants! Needs being food, electricity, rent and mortgages…things you NEED to survive and are non-negotiable. Wants being eating out, going to the movies or buying the latest Air Jordan’s, and generally, things you don’t need to survive.
Lastly, now that you have separated your expenses. Between needs, wants and paying yourself. You have now formed a system that will ensure you always have money available for emergencies, necessities and long-term savings.
Useful resources and facts
- 35% of Australians worry that they will never be able to purchase a house.
- One in five 18- to 29-year-olds use buy now, pay later loans and believe that Afterpay is the new credit card.
- 75% of Australians do not have sufficient funds to get them through a crisis.
