Eight ways to save $8000 this year

Eight ways to save $8000 this year

Making small changes in your life can have a big impact on your savings – and even help you budget better. Take control of your money with these eight simple tips from finance guru Ross Greenwood and your bank account will be richer for it.

“The cost of living is up and saving can be hard. But we’ve done a few calculations and worked out that you could save up to $8000 a year and, surprisingly, it’s easier than you think,” he told Nine’s Today show.

Say no to bank fees

Australians wasted around $53.5 million accessing their own money at the ATM in January, simply by using automatic teller machines serviced by a bank that is not their own, according to RateCity calculations.

Agreeing to a non-account holder surcharge of around $2 per transaction may seem minimal at the ATM, but as a nation we forked out more than $670 million in the past year, making it an expensive convenience.

“If you don’t use your own ATM you’re going to be charged $2 or $3 a time,” said Greenwood. “Do this once a week; that’s going to add up to $150 a year.”

Slash food bills

Australians wasted an estimated 4 million tonnes of food last year, with food accounting for around 40 percent of all household waste. By letting food go to waste we’re binning more than $1000 per person every year.

To reduce the impact on the hip pocket – and the environment – Australians should plan ahead to consume the food we buy or consider buying less to, says Greenwood.

“It’s also about shopping smart,” he said. “Take branded flour, for example, at $2.99, yet the generic flour is just $0.95. It’s the same stuff! If you shop smart and generic you can save up to $450 a year.”

Reduce restaurant bills

Asking your waiter for a discount on the bill may not be a realistic option. But there are ways to enjoy dining out without breaking the bank. Taking a family of four out once a week could cost you $60 or $70, he said.

“That could cost you up to $3500 a year. If you want to save $1700, do it once a fortnight.”

Lottery isn’t a savings plan

The likelihood of winning lottery is around one in 45.5 million, but those odds don’t deter many Australians with millions queuing up for the chance to win the big prize money.

Most of us would be better off saving the cost of the ticket, according to Greenwood: “A mega-pick costs $25 a week in Oz Lotto, which equates to $1750 a year. Sure if you can afford it no problems, but if you can’t it’s an easy saving.”

Coffee is an expensive habit

Research shows that Aussies spend around $770 million on coffee beans and instant coffee for brewing at home and that’s not taking into consideration the amount we spend on takeaway coffees.  

It’s a big call, but Greenwood suggests cutting out the daily grind to save a bundle – at $3.50 a day your coffee habit is sucking up a whopping $700 a year.

“I love coffee, but the truth is do I really it or is it something that’s a bit of a luxury?”

So are cigarettes

Take this for consideration, says Greenwood. “A packet of cigarettes could cost you around $16. Smoke three packets a week and that’s $48 and over the course of a year it’s $2500.”

“If it’s not all about your health, then certainly it’s a cancer on your budget,” he said.

Paying for unused memberships

Anything you subscribe to buy don’t use is a waste of money. If you pay a monthly gym subscription, for instance, you’ll be spending around $70 per month. If you never or rarely go you could be saving $840 a year.

“The same applies to magazine subscriptions, book clubs and wine offers – these are one area you can cut back,” he said.

Do you really need it?

Impulse shopping is a big money waster, says Greenwood. So sleep on it before you buy.

It’s easy to save money by cutting out or reducing some things you buy – and changing habits. Try one or two of these money-saving tips and watch your savings grow.

 

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Learn more about savings accounts

What is an ANZ locked savings account?

An ANZ locked savings account locks your money and prevents you from spending. You may use a standard savings account as the account where your salary is deposited. You can then withdraw funds when needed, but aren’t able to make purchases with it. However, this account may not grow much as the continual withdrawing of funds will limit the interest you can earn.

With a locked savings account in ANZ, you know your savings will grow because you can’t access the money. You can also qualify for a bonus when you deposit at least $10 per month and don’t make any withdrawals. To help you with this further you can set up an automatic transfer from your regular ANZ savings or transaction account so you don’t forget to make a monthly deposit.

Your ANZ locked savings account offers you a base interest rate of 0.1 per cent per annum plus an additional bonus interest of 0.49 per cent per year. The interest is calculated daily and credited to your account on the last working day of the month.

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.

Should I open a Commonwealth locked savings account?

If you have trouble saving money, a Commbank locked savings account could be a potential solution. A locked savings account won’t let you make withdrawals and as such, it can help you grow your savings balance if you keep topping it up. 

The Commonwealth locked savings account advertises high-interest rates and minimal maintenance fees, along with a host of other incentives that will encourage you not to touch the money. 

The account offers a higher interest rate for each month that you make limited or no withdrawals, as well as regular deposits. 

To qualify for a Commonwealth locked savings account with the advertised features, you will need to fulfil specific criteria such as:

  • Depositing a fixed minimum amount into the account every month.
  • Making a fixed number of deposits each month.
  • Making a minimum or no withdrawals each month.
  • Maintaining a minimum account balance.

Can you have multiple ING savings accounts?

Yes, you can open up to nine accounts with ING at any particular time. If you’re saving money for various goals, such as buying a car or taking a holiday, you can name each of your multiple ING savings accounts differently.

To get a Savings Maximiser account, you’ll need to deposit more than $1000 every month and make at least five additional purchases. If you also want to grow your savings, from 1st March 2021, you can earn up to 1.35 per cent per annum variable interest on one account with a balance of up to $100,000 when you also maintain an Orange Everyday account.

With ING, multiple savings accounts can help keep track of all your savings goals. All the accounts offer flexible withdrawals where you can withdraw as low or as high as you want without impacting your earning interest rate. However, you can only earn the bonus interest on one account. To apply for a Savings Maximiser account, you can visit ingdirect.com.au.

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.

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.

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. 

What is a Westpac locked savings account?

The Westpac locked savings account (also known as "Westpac Life") can help customers reach savings goals faster through bonus interest. Customers receive 0.2 per cent standard base interest with a variable bonus rate of 0.35 per cent when the closing balance at the end of the month is higher than the opening balance.

There are some conditions to earn the bonus interest on Westpac's locked savings account, though. First, you’ll need to increase the balance each month either through a deposit or not making any withdrawals, and then link it to a Westpac Choice account and make at least five eligible payments using your debit card. Please consult your bank as to what an eligible payment is. 

What are the two types of NAB locked savings accounts?

With a locked savings account in NAB, you can earn bonus interest and learn financial discipline. NAB offers two types of locked savings accounts, each with their own terms and conditions.

The NAB Reward Saver account pays a variable base interest rate of 0.05 per cent per annum and a bonus interest of 0.55 per cent. You’re eligible for the bonus if you make a minimum of one deposit on or before the second last banking day and have no withdrawals in the month.

Meanwhile, the NAB iSaver account provides 0.05 per cent as the standard base interest rate and a fixed bonus margin of 0.55 per cent during the first four months from the date of opening the account. You can park your cash in the account and enjoy unlimited monthly transfers between linked daily bank accounts without impacting the interest rate.

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.

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.

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 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

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.