How to save
It might seem easier to spend money on what you can afford as it comes instead of trying to save your cash, but here are some good reasons why you should save your money:
- It helps you work towards otherwise unreachable targets
- Savings are something to fall back on if you're ever in a time of need
- Having some money put away allows more independence
- The higher your bank balance, the more interest you earn!
Tips for saving your money
Saving money isn't hard. There are heaps of easy steps you can take to start your own saving habits.
The little stuff counts
Small change. It's annoying and weighs us down. It's easily lost, seems to amount to almost nothing, and is easily blown on a chocolate bar of a bottle of soft drink. Most people usually don't realise how quickly small change can add up to a larger, more meaningful amount. Start collecting your change in a safe place and let it accumulate. Before too long you'll have quite a large sum in small change.
Term deposits
If you happen to already have some spare cash lying around, then a term deposit could be just the thing for you. A term deposit is an account where the bank pays you higher interest if you agree not to withdraw a certain amount of money for a certain amount of time.
For example: A bank might offer a minimum term deposit of $1000 for at least 30 days at 5% interest. So, if you were to take out a $1000 term deposit for one year, you would earn $50 interest.
Every bank offers something different, so it might take a bit of fishing around to find the right term deposit for you. Luckily enough the banks are keeping up with the younger generations and our technology, so all the info you need can be quickly found on each bank's website.
Choose the right bank account
Opening a bank account is simple. You can do it easily at your bank, over the phone or on the net (don't need the apostrophe for this - it's become very common spelling). Before they let you open an account you'll have to provide some identification.
Some things that will help you identify yourself are:
- Drivers license
- Passport
- Student card
- Birth certificate
Don't stress if you don't have some of these - the bank will let you know exactly what you need.
The choice of bank account can make all the difference to how much you save. Bank fees and interest rates vary depending on a number of things including your age, the amount of money you have in the bank and what sort of bank account you choose.
Certain banks offer interest rates as high as 6% with no fees for a normal account. Fishing around on the net and checking the figures could help you save a lot of dollars in the long run.
If you want more info about opening a bank account, check out The Dollars and Sense website (new window)
Get an automatic savings plan
Some banks offer automatic saving plans, which allow you to set up a system so that a certain amount of money is taken from your regular bank account and put into a savings account on a monthly or weekly basis.
Savings plans are a great way to save if you have a regular income, whether it's from working part time or relying on your parents for pocket money.
Saving works!
Casey started saving for a car just before she turned 17 by setting up a savings plan with a high-interest bank account.
"I was working part time at the local café a couple of nights a week, and pumping petrol on Saturday mornings. I planned to move away from home to go to uni, so I knew I'd need a car."
She set up the plan so that $15 went into her account every week. "I was earning about 6% interest, which is way higher than most banks."
With the high interest, the savings plan and Casey's extra deposits when she could afford it, her savings added up pretty quickly.
"I borrowed a little extra money off my parents and was able to buy a really nice little car. My parents were so proud of me that they said not to worry about (paying back) the extra money, and bought me a cool new stereo for my car as my eighteenth birthday present. It couldn't have worked out better!"
So start saving!
Saving money is really easy. It'll prepare you for the future or help you buy your first car - it could even get you out of an unexpected sticky situation. Plus, it feels good to have some money to your name. So what are you waiting for? Start saving today!
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