Australians are being urged to focus on saving money and to look to high interest savings accounts to maximise your balance, while the domestic economy adjusts to the mining investment boom.
While many of you are already knuckling down with savings – the Reserve Bank of Australia (RBA) admits Australians are saving more than in recent years – it’s important to maintain a precautionary approach to your saving habits. After all, your financial future is not always certain.
“With a large boost to income [via the mining sector], we need to think about the balance between saving and spending, because we do not know the permanent level of the terms of trade,” says RBA governor Glenn Stevens.
Your cautionary savings plan
Whether you’re already saving or want to join those who are, here are a few tips to help motivate you to stay on track to your goal:
• Determine how much you can afford to bank
• Set yourself a savings goal
• Don’t dismiss small change
• Compare high interest savings accounts
Before you deposit your first sum for savings, plan the amount you can comfortably afford to save. By forcing yourself to save half of your income when you can only spare one quarter will add unnecessary financial stress to your weekly budget.
And while it may seem obvious to some, the lifestyle changes that come with sacrificing a part of your spending to savings can come as an unpleasant surprise to others.
The next thing to do is come up with a realistic savings goal. For example, knowing that you want to save $7,000 in a year will allow you to map out your deposits and help you plan to reach it.
It might seem insignificant, although collecting loose change and depositing it into a
high interest savings account, can add up to hundreds and even thousands within a year, so start filling your piggy bank.
The best savings account
Finally, one of the most important things you need to decide on is your savings account.
With hundreds high interest savings account available through RateCity, interest rates and features can vary dramatically.
For example, the difference between a 2.5 percent account and a 6.5 percent account for someone saving $700 a month over three years is about $1,600 in extra interest.
As Governor Stevens indicated, booms and good days don’t last forever, so while you’re living comfortably on spare cash, make it work for your future by finding the perfect savings account today.