5 tips to fast-track your savings
Simple habits can make all the difference
An overseas holiday, a home deposit, a car or an education fund – no matter what you’re saving for, there are some simple ways you can achieve your goal even sooner. Here are five ways to boost your savings balance.
1. Set a savings safety-net
Most of us save with a particular goal in mind – this year’s summer break, for example. But when the holiday is over, there’s nothing left but memories.
Instead, get into the habit of direct debiting a set percentage of your salary every month into a high interest savings account. You could even split your pay packet and just keep a set amount for expenses and bills in your everyday account.
2. Commit to your emergency fund
On average, Australians save 12% of their disposable income every month1. If that seems high, think about any areas you could cut back in your budget – just $50 more each month can quickly add up and give you a much more comfortable buffer in case unexpected expenses come up.
3. Pop any windfalls straight into your savings
If you get a bonus, tax return or a generous gift, start earning interest on it straight away. Deposit it into your savings account, and remove the risk of temptation to shop.
Get into the habit of direct debiting a set percentage of your salary every month into a high interest savings account.
4. Tap into the power of compound interest
Albert Einstein once described compound interest as 'the eighth wonder of the world.' Effectively, your savings keep making money for you while you sleep – because the interest you earn is also earning interest.
5. Cut down your credit card debt first
Of course, compound interest works the other way too – if you are carrying credit card debt, you might be paying interest on your interest. Which is why it's also important to clear that debt before you commit to your new, improved savings plan.
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