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Boost your savings with four simple tips

Boost your savings with four simple tips

Sweet-toothed Australians were tipped to spend a combined $185.7 million over the Easter long weekend, up 5.2 percent on last year, with chocolate, seafood and short getaways set to boost spend.

Now that the sugar high has abated, for many of us it’s back to work and back to good savings habits – research shows household savings have climbed to their highest levels in three years.

Financially astute consumers are increasingly realising the importance of having a savings buffer in case of emergency, with at least three months’ salary the ideal amount to have tucked away, ING Direct’s latest Financial Wellbeing Index shows.

According to the report, the average Australian household has $11,798 in their savings account – up 21 percent on last quarter and 37 percent more than a year ago.

But it falls just short of our savings goals, the survey found. Based on the national median salary of $70,365, the desired savings buffer is $15,200.

To bridge the gap, survey respondents said they intend to cut back on discretionary spending and follow a stricter budget, with 15 percent planning to take fewer holidays this year, 41 percent following a stricter budget and a third dining out less often, ING Direct reveals.

If you’re among the 29 percent of Aussies who already contribute to savings each payday, then good on you! If you’re among the 21 percent who wants to set a savings goal, here are some simple tips to help get you started.

1. Start at the end

Find a reason to save – a new car, your first home or a holiday – and make it your motivator. If a photo of a tropical island on your computer or phone screen helps you to save for a holiday, do it.

The key is to make saving fun, rather than it feeling like a chore, said financial advisor Deborah Kent, owner of Integra Financial Services.

“But never set a goal that’s too long. Set short-term goals so you can attack it in chunks – it’s more manageable that way,” she said.

2. Watch it grow

Once you’ve decided on a goal it’s time to figure out how to achieve it by putting a savings plan in place. Getting into the habit of making regular savings – even if the amounts are small – can be more effective and motivating than doing so on an ad-hoc basis. Use a site like RateCity to compare savings accounts and consider setting up a scheduled transfer into your saver to take place a few days after your salary goes into your account.

3. Banish bad debts

Debt is a concern for many Australians thanks to a range of factors including easy access to credit cards and a tendency to spend more than we earn, says Paul Clitheroe, chairman of the Australian Government Financial Literacy board.

“A key starting point in getting control of debt is to know exactly what you owe. You’d be surprised how many people don’t have a firm rein on their credit card balance or home loan,” he said.

Give your finances a “health check” and consider refinancing any products that aren’t offering competitive rates or aren’t working for your circumstances. Doing so could free up a couple of hundred dollars to add to your savings plan or help pay down debt.

4. Keep track and reward yourself

Finally, remember saving isn’t about depriving yourself so budget in a small reward whenever you reach a savings milestone so you have something to work towards.

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