With so many bills to be paid and so little money coming in, many Australians are struggling to put away any money in their savings accounts. However, saving for a rainy day is just as important - it not only ensures you have a financial cushion to fall back on, but helps you purchase major items without incurring credit card debt.
Here are three tricks you can easily incorporate into your everyday life to help you build up a cash reserve.
Plan a budget
The first thing anyone looking to save money should do is to draw up a budget of your expenditure. By calculating your income and how much you spend on daily expenses and bill payments, you can start to figure out how much you have left at the end of the day to save. Planning a budget can also alert you to purchases you may not need to make - such as a new iPhone or a pair of shoes.
D&B's recent Consumer Credit Expectations survey revealed nearly half of consumers were likely to spend money on non-essential items such as entertainment and beauty treatments. At the same time, six in ten Australians were also worried about their current financial situation.
ASIC's Money Smart has a budget planner that helps you check where your money is going and that your money is going towards key priorities.
Put money away
After you have drawn up a budget, you will know how much you can afford to save. Put this amount away each month into your savings account after pay day - but ensure you have paid off your bills first. Sometimes, having a separate bank account dedicated to savings can help, particularly if you prohibit yourself from withdrawing any money unless absolutely necessary. The rest of your 'everyday' money can go into your main account.
Open a high-interest account
Make your money work harder for you by depositing it into a high-interest savings account. There are a variety of comparison tools out there, so take time to research what different financial institutions offer. Some banks have promotional interest rates that only last for a couple of months, which may be an incentive for you to save more during those months and then transfer to another high-interest account when the promotion ends.
Check back next week for three additional tips for sensible saving.