We were taught how to count money in school, but what about how to save it? There are a few small changes you can make to the way you manage your finances that can have a huge impact on your savings account over the year.
The first thing you should think about is opening a high interest savings account and having your household income go directly into it. You will then be able to take advantage of the high interest offered on the account and from there you should allocate yourself ‘living expenses’. In order to do this you should first sit down and write yourself a weekly budget.
Work out exactly how much you need each week for things like food, petrol, leisure and any other non-essential expenses. Assuming you are paid weekly, every time your income goes into your high interest account, only transfer out your ‘living expenses’ for the week and leave the rest in there for the essentials such as your rent, mortgage, insurances and bills.
Remind yourself that the money you have either taken out either in cash, or transferred to another account for living expenses is all you need for the week. This will help you refrain from over spending. Money management comes down to the way you see your money and your motivation to save. If you see that you have $200 for living expenses for the week, as you start to chip into it you will notice yourself refraining for those unnecessary expenditures.
Doing this means your savings will grow each time your income goes into your high interest account and over time the interest you make on it will contribute to your savings.
If you need more tips or advice, contact our independent certified financial planners today!