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Start saving now – tips to make saving easier

July 13th, 2011 -

We all understand the importance of saving.

Unfortunately, many of us do not save – generally because we just don’t get around to it.

Set savings goals

The first step is to set some savings goals. Decide what you want to save for. It may be a short-term goal like saving up for a family holiday, new TV or computer. It is also important that you consider your long-term savings goals and look towards how you are going to fund your retirement years. Finally, it is wise to set some savings aside for those inevitable emergencies!

Once you have an understanding of your savings goals you can then break it down to weekly/fortnightly/monthly savings figures. The next step is to commit to your savings plan.

Set up a savings plan

A good savings plan will ensure that you achieve your savings goals. It is vital that you make it as difficult as possible for you to ‘break’ your savings. Set up a separate specialised savings account – there are savings accounts that make it harder for you to access the money while you are saving (there may be penalties for withdrawing funds) but allow you to save faster (by earning a higher interest rate). If you receive a pay rise you should consider increasing your regular savings amount – before you get used to spending the extra money.

Understand the power of saving

As with borrowing money, interest rates add up! As your savings grow from your regular deposits so too do they grow from regular interest payments. By leaving the interest your savings accrue in the account you start earning interest on your interest.  That is how you make your money work for you!

Review your spending

Saving isn’t just about sacrificing a part of your income. You should regularly review your spending (both personal and household) to ensure that you are not overspending. Savings can be made just by changing a few habits. For example:

  • Shop smarter at the supermarket.
  • Make your lunch at home rather than buying it each day.
  • Stop smoking – it will have a positive effect on both your health and wallet!
  • Decide to have a video evening at home rather than going to the movies.

It’s also good practice to review your household outgoings like phone, power and insurance. Are you getting the best deal? When considering special offers from rival suppliers be sure to take note of any terms, conditions or penalty fees – that ‘too good to be true’ offer just may be that!

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