Jack Han investigates the latest tools to help Gen Y start saving
November 4, 2009
Gen Y is building its reputation of being the “bad saver” generation, with thousands resorting to lending between friends to meet debts and expenses. With a wide range of savings accounts invented just to help them save, is this spelling out the end of their bad savings tale?
St George Bank has recently introduced the Sense Everyday transaction account to give Gen Y extra savings tools, such as categorised spending charts, graphs of savings targets, and an innovative ‘round-up' feature that allows savers to transfer all the spare cash between their earnings and expenses to a savings account.
This follows the earlier introduction of the Smartypig savings account, hosted by ANZ, which combined a savings account with social networking websites such as Facebook and Myspace.
Is this the future of the Gen Y savings plans?
What makes these special features appealing is that they relate to Gen Y's lives and needs. But these flashy tools might be distracting from the real savings made, which is the interest that you can earn from simply comparing and choosing a high interest savings account, such as the UBank USaver, at 5.11 percent, or RaboPlus and ING Direct both have 5.00 percent rates.
Gen Y savers will have to ask themselves whether the extra features that encourage savings can be worth potentially hundreds of dollars a year in fees and lower rates. By simply making their own savings plans and sticking to them, they can teach themselves a few savings lessons without sacrificing the high interest return.
If you are serious about saving, the first thing you should do is to pay off your credit card, and then switch to a debit card that gives you the same convenience, without the debt.
Then start drawing up your own savings plans, including your monthly expenses and earnings, as well as your short and long-term savings goals. Then use the online savings calculators to see how much you will need to save every week to achieve them.
Make your savings plan as personal as you can, because you need to prove to yourself that you're in charge of your financial future. The figures tell one story, but you can still make the Gen Y stereotype a tale of fiction.