Saving money can be difficult for many Australians, and the hard truth for brokers is that 24% of them aren't saving any money at all. Sarah Eifermann, mortgage planning professional and SFE Loans Founder, has gotten to the root of this savings problem, putting it down to a lack of financial literacy.
Knowledge surrounding spending habits and understanding how to manage your money is extremely impactful on an individual's bank account, yet financial literacy seems to be lacking throughout the Australian community.
Unless you've studied finance or have been surrounded by those who are in the know when it comes to their hard-earned money, your saving habits may not be up to par with the life you're living and this can have a large impact on your ability to obtain a home loan down the track. Fear not! There's no time like the present to begin your savings journey and here are some tips to get you started.
TIPS FOR SAVINGS MONEY
Set a savings goal
Human's love having something to work towards, it keeps us accountable and motivated. When you set a savings goal that is important to you and it becomes a priority, saving your money becomes less of a sacrifice and more of a journey towards your end goal. To put a sum and timeframe to your goal, check out the money smart savings goal calculator here.
Make a budget
Where there's a savings goal, you'll need a budget to meet it. While the thought of a budget may be daunting for some, it has a functional purpose that more often than not, won't have too much of an impact on your everyday life. You can still increase your savings while maintaining your lifestyle.
- Budgets help you set spend limits
- Budgets help you set goals
- Budgets help you change your bad money habits
- Budgets help you get what you want in life
Track your spending
There are so many resources out there that can help you understand and track where your money is going. You might be surprised to find out that those little things you purchase such as a new item of clothing or daily coffee really do add up. Tracking your day to day spending ensures you don't live beyond your means and can help you find areas where you can save a little more.
If you want a course that has everything you need to know about bossing your finances, tracking templates included, check out the Helix Planning Streetwise Money course.
Open a separate savings account
Opening a savings account separate from your spending account acts as a place to put the money you have leftover after taking care of your necessary expenses, this is also known as discretionary income. Savings accounts also tend to have higher interest rates than everyday transaction accounts, a nice little incentive to keep building your savings and stop you from pulling money out unnecessarily.
Now, it's time to take the above steps and start building up your savings account.
If you need some additional advice on saving for a property or the loan process, SFE Loans is here for you. Contact us to arrange a chat!
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