Get more money into your savings account

Get more money into your savings account

5 March 2008

As interest rates in Australia are climbing, it is a good time to save money. Taking advantage of the higher interest rate by saving money you might otherwise be throwing away will both let you amass greater wealth as well as helping to slow economic growth and thus hopefully inflation. Don't worry, you don't need to give up your lifestyle in order to save more. You need to take control.

A good starting point for increased savings is changing to an online savings account with no monthly account keeping fees. These often have a secondary advantage of providing a greater number of electronic transactions for free each month. If you can limit your account use to only using the limit of free transactions each month then you should retain the maximum amount in your savings account.

If you're finding it hard to keep money in your account, look to your expenditure on minor luxuries. Major luxuries are usually expensive enough for anyone to take into consideration for budgeting, but it is often the everyday luxuries that demolish your savings. If you eat out for lunch each day, it's probably costing you around $50 a week, if not more. If you're smoking and have even briefly considered giving up, do so before you begin saving. Coffees, cakes, newspapers and magazines can all also add up. Cutting the snack food out of your shopping budget will fatten up your savings while slimming down your body, too. If all you are saving for is a larger luxury, like a spa or holiday, losing the minor luxuries to get the larger one should see you to your goal much sooner.

For the occasional naughty luxury, you might want to use a credit card with a reward program and an interest free period instead of using cash. They cost more in annual fees than a basic credit card, but as long as you pay the balance within the interest free period, you can take full advantage of the reward points you'll gain. These can often be spent on luxury items and plane tickets, giving you a taste of the high life without having to fork over the money for it. Additionally, by only removing money from your savings account at limited intervals you can gain the greatest amount of advantage from accounts that calculate interest daily. However, it must be said again, none of this is advantageous if you don't pay off the balance of your credit card within the interest free period.

Try not to use your tax bonus as a brief monetary reward. Even if you aren't receiving much back, consider it more as a boost to your savings account rather than just extra cash lying around. Any money that you would normally treat as disposable should be devoted as much as possible to your savings. Your tax refund is no different in this regard.

Don't just go with the flow in your social life, take control of it. The amount of money you can save by deciding what you do and where you go can be ludicrous. Be the first to plan events, and take on the mantle of organiser in your social group. If you just went along with whatever was happening before, you'll know that most people prefer someone else organising things for them. It may seem odd at first, but by spending effort on planning low cost outings rather than spending your money on ill-conceived drinking binges, you could have a richer life and financial position.

Once you have gathered a reasonable amount of savings, consider transferring a large portion of it to a high interest term deposit account. If you don't see yourself spending your money in the near to mid future, this is one of the surest ways to greatly increase the returns on your money. If you think there are better investments for your newfound wealth, consult a financial adviser. Professionals are able to make your money go farther than you can, just as long as you do your research into who will be the best consultant for the kind of investments you wish to make.

Saving is a vital part of healthy personal finances, and the key is self-restraint. Limit your exposure to frivolous spending and train yourself to focus time on managing your money. You should soon see your savings plan giving more than satisfactory returns.

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