Four ways to trick yourself into saving more

Four ways to trick yourself into saving more

Worried about your mentality towards saving money? These tips could help you trick yourself into becoming a thorough and organised spender.

Match your kids

According to Roy Morgan Research, our saving habits start young. Their survey of young Australians found that 40 percent of our kids between 6 and 13 who receive money from their parents say they put some away in the bank, while 28 percent even have a specific item they’re saving for. 

But how to help them stick to this? Consider saving alongside your kids. If you give them pocket money, agree on what percentage of this will go into savings, and do the same with your own income. You’ll be slowly generating a healthy savings account balance, while also teaching the young ones some fantastic habits. Don’t just talk the talk with the young ones — walk the walk! 

Reinstate the swear jar

A hallmark of pop culture, the swear jar is something that could help you sneakily save a significant amount of money. If you’re unfamiliar with the premise, it’s quite simple: You place a coin in a jar every time you swear around the house. It doesn’t have to be specifically for cursing either — it could be for every time you don’t do the dishes, or even leave the toilet seat up.

Setting one of these up in the home is a fun way to curb unsavoury habits, and also a method of tricking yourself into putting aside a lot of money. Coins start small, but left alone over time, a swear jar can build  up a lot of funds. See if it works for you! 

Just as a reminder to myself 

According to the Australian Bureau of Statistics, in 2011-2012 the average credit card debt per Australian household with a credit card was $5,300. It’s easy to mindlessly swipe the plastic, but there could be a way to halt this spending and improve your saving. 

Is there something you’re saving for? Or perhaps a debt you are trying to get out of? Fix an image that represents this to your credit card. That way, every time you pull it out you’re reminding yourself of debts or goals, and perhaps thinking better of that spending. It could be the house you want, or your child — anything to trigger a response that keeps you saving money! 

Keep the results front and centre

Sometimes, putting yourself in a savings frame of mind is as simple as seeing the tangible results. If you use a high interest savings account, perhaps set up alerts that tell you how much money you have earned through interest once a week. 

Keeping tabs on this means you have tangible results right before your eyes, and perhaps even greater incentive to keep saving money.

Saving is a long term process, but it doesn’t have to be an impossible one. Adopting some of these tips into your daily routine can trick your brain out of being predisposed to spending money, which in turns lets you build up a savings account that little bit more easily. 

When you want to compare credit cards or account to see which ones fit your newfound taste for putting money aside, make sure to use our savings account calculator or one of the other tools available. 

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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.

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.

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.

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.

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.

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.

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.

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.

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.

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 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

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

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 can I get a $4000 loan approved?

While personal loans and medium amount loans don’t offer guaranteed approval, there are steps you can take to help increase the likelihood of your application being approved, including:

  • Fulfilling the eligibility criteria (providing ID, proof of residency, proof of income etc.)
  • Checking your credit history (you can order one free copy of your credit file per year, and make sure that there aren’t any errors that may be bringing down your credit score)
  • Comparing carefully before applying (making multiple loan applications can mean having your credit checked multiple times, which can look bad to some lenders and reduce your chances of being approved by them)