10 money pro tips you need to try

10 money pro tips you need to try
  • Pay your own way

We’ve all been in the awkward position where someone suggests you divide the dinner bill evenly and you only ordered a salad, but they’ve had a main, dessert and two cocktails. Being assertive and making sure you pay your own way will ensure that you don’t overspend.

Sometimes paying your own way can get a little tricky, particularly if you’re share housing or are a generous friend and family member. An expense sharing or tracking app such as Splitwise takes the trouble out of sharing expenses and splitting your bills. The app stores all expenses and IOU’s in one place and provides “fairness calculators” that gives users mediation advice about money fairness issues.

  • Wait 72 hours before buying anything

This advice can be applied to any non-essential purchase but would be most effective to keep an online shopping habit under control.  Before you press that check out button, give yourself three days to think it over and decide whether you really need to spend money.

  • Shop around for your home loan

Just because you’ve been with the same bank since you were a kid doesn’t mean you must take out your home loan with them. Comparing various home loan products based on your individual needs could see you saving thousands of dollars over the lifetime of your loan by ensuring you pick one that is right for you. 

  • Investment apps

While it may seem counterproductive to spend your money to save it, investment apps are just another exciting way to invest your spare change instead of a traditional piggy bank.

Acorns is a popular investing app in Australia that does just that. Whatever small amount you spend, Acorns will round up that purchase to the nearest dollar and invest the difference. For example, if you spent $12.50 on lunch, Acorns will take 50c and store it in your portfolio for investment.

  • Use cash!

This one is pretty simple; if you have to watch your money physically leave your wallet, you’ll feel less inclined to spend it.

  • Zero spend day 

Try to dedicate one day a week or fortnight to zero spending – and stick to it! Maybe you want to have a lazy Sunday? Or maybe you’ve done all your grocery shopping on a Thursday night and made it so you don’t need to buy lunch on Fridays? Whichever way you implement them, zero spending days will help you force yourself to save.

  • Credit card rewards programs

If you’re more of a tap-and-go than cash-in-hand spender, why not pick out a credit card that rewards you for using it to make everyday transactions. Some credit card rewards programs offer up to three points per dollar spent, or bonus points for shopping at certain stores or spending a certain amount of money. These types of cards generally charge higher interest rates and fees than standard credit cards, so it’s best that you pay your debt each month to prevent the interest costs outweighing the benefits of the rewards offers.

  • Complete other people’s tasks 

If you haven’t heard of Airtasker, it’s a website that allows people and businesses to outsource their tasks. A user will describe the task they need completed (cleaning, mowing their lawn, editing the grammar in their essay, updating their website etc.) and you can help these users to complete these jobs to earn money. You could earn up to $5,000 per month just by completing tasks.

  • Transfer your credit card balance

Are you paying one or even multiple credit card debts? Is the interest hurting your ability to save? Credit card holders who transfer their balance to a new card could save an average of $1,262 in interest and fees and pay their debt off 6 months earlier.

  • Be smart with your food

Our relationship with food is often criticised as wasteful. Food Wise believes that Australians discard up to 20 per cent of the food they purchase, which equates to 1 out of 5 bags of groceries they buy. Overall, the average Australian household throws away $1,036 worth of food every year, totalling around $8 billion dollars. To help curb this problem, try to use some recipes that help you clean out your fridge. Website such as Supercook allow you to input your ingredients and instantly find matching recipes from popular cooking sites.

Further, RateCity recently calculated that packing your own lunch every day amounts to a saving of around $1,400 every year. if you were to put these savings away, you would have an additional $42,000 after 30 years.

Did you find this helpful? Why not share this article?

Advertisement

RateCity

Money Health Newsletter

Subscribe for news, tips and expert opinions to help you make smarter financial decisions

By signing up, you agree to the ratecity.com.au Privacy & Cookies Policy and Terms of Use, Disclaimer & Privacy Policy

Advertisement

Learn more about savings accounts

What is a savings account?

A savings account is a type of bank account in which you earn interest on the money you deposit. This makes it one of the easiest and safest investment tools.

What is a good interest rate for a savings account?

A good rule of thumb to keep in mind with savings accounts is to look for a rate that is higher than the CPI inflation rate. This number is constantly changing, so check the Reserve Bank of Australia’s page. If you aren’t earning interest above this then the value of your money will go backwards over time.

How to open a savings account for my child?

Some banks and financial institutions allow parents to open a bank account for their child as soon as it is born, and start depositing funds to go towards the child’s future.

Children’s savings accounts generally don’t have fees, and are structured to help develop positive financial habits by limiting withdrawals, encouraging regular deposits, and earning interest on the savings, similarly to standard savings accounts.

Can you set up a savings account online?

Yes. Several large and small banks offer online applications for savings accounts, and there are also online-only financial institutions to consider.

Online-only savings accounts are often less expensive than other savings accounts, though they may not offer the same flexibility, features, or face-to-face service as more traditional savings accounts.

Who has the highest interest rates for savings accounts?

As banks frequently change their rates, the most accurate way to know who currently has the highest interest rate is to use a savings account comparison tool.

How does interest work on savings accounts?

The type of interest savings accounts accrues is called compound interest. Compound interest is interest paid on the initial deposit amount, as well as the accumulated interest on money you have. This is different from simple interest where interest is paid at the end of a specified term. Compound interest allows you to earn interest on interest at a higher frequency. 

Example: John deposits $10,000 into a savings account with an interest rate of 5 per cent that he leaves untouched for 10 years. At the end of the first year he will have $10,512 in savings. After ten years, he will have saved $16,470.

What is the interest rate on savings accounts?

As banks frequently change their rates, the most accurate way to look at interest rates on savings accounts is to use a savings accounts comparison tool. When you look at the savings rate check what the maximum and minimum rates are. Often banks will offer you a promotional rate for the first few months which is competitive, but then revert back to a base rate which can sometimes be less than inflation. Ongoing bonus rates are often a safer bet as they will keep rewarding you with the maximum rate, provided you meet their criteria

Can you set up direct debits from a savings account?

It’s not usually possible to set up a direct debit from your savings account to cover ongoing expenses or bills, as savings accounts are structured around growing your wealth by earning interest on regular deposits, and discouraging withdrawals.

Some transaction accounts allow you to set up direct debits and also earn interest, though you may not enjoy as much flexibility as a dedicated transaction account, or get as high an interest rate as a dedicated savings account.

Can you direct deposit to a savings account?

Yes. You can make one off payments or set up regular direct deposits into a savings account. This can be organised easily through online banking or by making deposits in a branch. Talk to your lender to find out the easiest way for you to set up direct deposits.

Can I overdraft my savings account?

A lot of savings accounts won’t let you overdraw. Some will allow this feature but you’ll need to apply first. It’s best to read the fine print and check with your lender whether this is a feature they offer. It can be a helpful addition, but as your lender can charge you a fee as well as interest for going into negative numbers, it’s best to avoid overdrafting when possible.

Can you have a joint savings account?

Yes. Joint savings accounts can be useful for two or more people wanting to combine their savings to meet shared financial goals, including spouses, flatmates and business partners.

Some joint savings accounts require all parties to sign before they can access the money. While less convenient, this extra security can help encourage all parties to meet their shared financial goals.

Other joint savings accounts allow any of the account holders to access the money. These accounts can be convenient for financially responsible couples that trust one another implicitly. 

How do I open a savings account?

Opening a savings account is a relatively simple process. If you’ve found an account with a suitable interest rate, you’ll just need to get in contact with your chosen lender via a branch, phone call or hop online to begin the process. 

You may be required to provide:

  • Personal details, including identification (driver’s license, passport etc.)
  • Tax file number
  • Employment details

How to make money with a savings account?

Savings accounts make you money by earning interest on your savings. The more money you deposit, the longer you leave it in the account, and the higher the account’s interest rate, the more interest you’ll be paid by the bank or financial institution, and the more your wealth will grow.

To make sure your savings account makes money and doesn’t lose money, it’s important to maintain a large enough minimum balance that the annual interest earned exceeds any annual fees charged on the account.

How much money should I have in my savings account?

A good rule of thumb when working out a minimum balance for your savings account is to make sure that you’ll earn more in annual interest on your savings than what you’ll be charged in annual fees.

If you’re saving with a specific goal in mind, prepare a budget so the interest you earn on your deposits will help you efficiently reach this goal. Online financial calculators may be helpful here.