Mediterranean diet: good on the hip (pocket)?

Mediterranean diet: good on the hip not on the savings account

Fresh fruit and veggies, nuts, fish and a healthy dollop of olive oil: There’s nothing quite like sitting down at the dinner table to a nice Mediterranean-style meal. 

According to a new study from the University of Minnesota, however, this isn’t just a great idea for your taste buds — it’s also a healthier and more sustainable way to eat. Mediterranean, vegetarian and pescatarian (fish-based diets) could reduce incidence of cancer by around 10 percent, as well as death by heart disease by around 20 percent.

“We showed that the same dietary changes that can add about a decade to our lives can also prevent massive environmental damage,” said David Tilman, professor at the University of Minnesota’s College of Biological Sciences. 

Despite these benefits, human nature tells us that people won’t simply flock to something because of its health advantages — particularly if it affects the hip pocket. 

Higher incomes mean higher cholesterol

Interestingly, the results of the study show that consumption of a less healthy diet — that is, the regular modern diet defined by high calorie intake and lots of meat protein — intensified as living standards increased. As incomes rose in the period from 1961 to 2009, so did the prominence of such a diet. 

These trends led researchers to project that, by 2050, diets would contain fewer fruits and vegetables, and more pork, beef, poultry, eggs and empty calories. This will not only raise the risk of the aforementioned diseases, it would also increase greenhouse gas emissions by around 80 percent. 

Mediterranean diets hit harder on wallets than health

Unfortunately, for those wanting to curb their reliance on such foods, they may have to make some adjustments on their savings account calculator.

A diet study conducted by PREDIMED in 2013 found that expenditure tended to increase the more one adhered to a Mediterranean diet, as reported by Medscape. While this was in a European context, there is evidence this fact translates in Australia, too.

According to the Australian Government Fisheries Research and Development Corporation, seafood tends to be priced higher than chicken, beef and lamb, although canned fish such as tuna and salmon tends to be quite cost-effective — hence the popularity of such products. This is significant, as according to Australian Bureau of Statistics figures from 2007/08, 30 percent of Australian houses had less than $500 a week to spend on goods and services. 

Even though a vegetarian diet is typically less expensive, consumers may not find much respite there either. Just recently, the Association of Superannuation Funds of Australia reported that the price of fruit had risen by 14.7 percent over the September 2104 quarter. 

Save money on health costs

Consumers may want to look at it another way, however. According to the 2013 Australian Dietary Guidelines report from the National Health and Medical Research Council, health expenditure for type 2 diabetes (one of the diseases that can be avoided through alternative diets) is predicted to jump by $1.4 billion to to $7 billion a year by 2023. 

A study from the Sapienza University of Rome titled Cost and Cost-Effectiveness of the Mediterranean Diet: Results of a Systematic Review similarly found that the Mediterranean diet was a much better long-term investment, due to health costs. 

Looked at this way, consumers may be spending more now for long-term savings with these alternative diets — not to mention saving their health. 

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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.

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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.

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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

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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. 

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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.

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 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.

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.

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 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.

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 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.